Egghead Falls on Slower Sales

Egghead.com, Inc. (Nasdaq: EGGS) wasdown 19 cents at $1.03 early Friday after the software e-tailer said salesfor the last quarter of 2000 will be lower than previously thought.

The company said it still expects a loss of 23 to 25 cents per share for thequarter ended December 31st, better than the 41 cents analysts werepredicting.

Revenue, however, will be $91 million to $93 million, below previousprojections, because of “a softening of consumer demand for personalcomputers and related technology products,” Egghead said.

“We are pleased with the progress in our business accounts program, whichoffset some of the downward pressure on margins as a result of seasonalfactors and our promotion activities,” said president and chief executiveofficer Jeff Sheahan. “This, combined with expense reductions, enabled us toreduce our operating losses for the fifth consecutive quarter as we continueour march toward profitability in the fourth quarter of this year.”

As part of its plan to cut costs, Egghead announced in September that itwould move 20percent of its staff from Silicon Valley to Vancouver, Washington.

The company has also been recently hit with a high-profile hack attack. In December, Egghead said that a hacker had breachedits security system and entered its computer database. However, thecompany said last week that an investigation showed no credit cardinformation was stolen.

Egghead said it has taken steps to beef up its security system in light of the incident.

Based in Menlo Park, California, Egghead sells computer hardware andsoftware, consumer electronics and other products over its Web site. The company plans to report results on February 22nd.

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