Soft Top Line Hits CNet

Shares sink 10% after hours as weak guidance overshadows a narrower-than-expected loss.
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CNet Networks

(CNET) - Get Report

posted a narrower-than-expected first-quarter loss Monday, but a soft revenue number and weak guidance sent shares tumbling in after-hours trading.

The San Francisco-based online media outfit said it swung to a first-quarter loss of $1.1 million, or 1 cent a share, reversing a year-earlier profit of $383,000, or less than 1 cent a share. Analysts polled by Thomson First Call had an average estimate for a loss of 2 cents a share, while CNet's own guidance had called for a loss of 2 cents to 4 cents a share.

The company's revenue rose to $83.4 million from $71.2 million, shy of Wall Street's estimate of $86 million and at the low end of CNet's February projection of $83 million to $87 million.

For the second quarter, CNet forecast revenue of $88.5 million to $92 million, below analysts' projection of $95 million. The company expects earnings to range from break-even to 2 cents a share, including 3 cents to 4 cents in stock-option costs. Analysts had forecast earnings of 4 cents a share, including stock options.

CNet lowered its full-year revenue projection to $386 million to $403 million from a prior range of $395 million to $407 million. The company now sees earnings of 18 cents to 23 cents a share, including 13 cents to 14 cents in stock-option expense. CNet's prior guidance called for EPS of 18 cents to 25 cents; analysts target earnings of 23 cents.

CNet shares recently sank $1.31, or 9.9%, to $11.96 in after-hours trading.

"Although we are seeing more impact from transitions in our endemic categories in the first half of the year than we originally expected, we also continue to expand our audience and customer base as we grow our core brands and add new ones, positioning us well for the growing opportunity in Internet advertising," said Chairman and Chief Executive Shelby Bonnie in a press release.