Q4 Warning Sends NetCreations Lower

NetCreations, Inc. (Nasdaq: NTCR)was down 9/16 at 5 7/16 Tuesday after lowering its revenue and bottom-line forecastsfor the fourth quarter because of a weak online advertising market.

The New York-based company, which provides e-mail marketing services, saidrevenue for the quarter will be in the US$12 million to $14 million range,with a loss per share of 4 to 6 cents. Excluding one-time charges, per-shareresults will be between a 2-cent loss and breakeven, NetCreations said.

“NetCreations still faces many of the same challenges that the vast majorityof Internet advertising and marketing companies experienced during the thirdquarter,” said chairman and chief executive officer Rosalind Resnick.

“The marketplace continues to be a challenging one in which to operate, and,as such, our revenues and earnings to date have been adversely affected bythe decline in marketing-related expenditures associated with our e-commercecompanies and other dot-com customers,” Resnick said.

Adding to the companies’ woes, said Resnick, is the fact that thetraditional pickup in spending as the holidays approach has not yetmaterialized.

“However,” Resnick added, “we are pleased that our database continues togrow at an accelerated rate.” NetCreations said its PostMasterDirect.com database isgrowing by more than 80,000 net new e-mail addresses a day, and hasincreased to more than 19.8 million addresses from 15.7 million at the endof the third quarter.

PostMasterDirect.com is an opt-in database that collects addresses fromInternet users who have requested promotional information. NetCreationsmanages e-mail lists for more than 380 Web sites, including CNET, Uproar andAbout.com.

Earlier this month, NetCreations reported third-quarter net income of$576,347, or 4 cents per share, down from $1.3 million, or 11 cents, in theyear-earlier quarter. Revenue rose 188 percent from a year earlier to $14.2million. The company said at the time that it expected the industry wideslump in ad spending to continue to put pressure on results into next year.

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