CMGI Sinks on NaviSite Warning

CMGI (Nasdaq: CMGI) was at US$4.81 Friday morning, down 28 cents, even as the Internet incubator said weak results fromone of its operating companies will not hurt its financial performance inthe quarter just ended.

NaviSite (Nasdaq: NAVI), an applicationhosting provider backed by CMGI, said it expects a loss per share of 52 to55 cents for the second quarter ended January 31st, with revenue up just 4to 8 percent from a year earlier.

NaviSite was down 50 cents at $2.31 after saying results for the quarterwere hurt by the decision to terminate some 45 customers, mostly dot-coms,because of “payment problems,” as well as a slower overall businessenvironment.

CMGI said its own second quarter, also ended in January, will be in linewith earlier expectations.

“We remain comfortable with our previously issuedguidance of $335 million to $345 million in consolidated revenue for thequarter,” said David Wetherell, chairman and chief executive officer.

“Fortunately, CMGI is seeing stronger-than-expected performance in othersegments that more than offsets our weaker performing segments,” Wetherellsaid. “This is a significant benefit of our diversified set of companies ina weakened economy. We continue to aggressively evaluate all our businesslines to ensure they are best positioned for growth and profitability.”

NaviSite earlier this month embarked on a cost-cutting plan that includedclosing two offices and cutting 44 jobs, or 7 percent of its workforce.

CMGI’s latest earnings forecast was issued last month, when the company lowered itsoutlook for the current fiscal year, saying the “market dynamics” forits various companies are “unpredictable” in the current climate forInternet businesses.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories

LinuxInsider Channels