Net loss for the quarter was $6.15 million, slightly below its warning of a loss of $6.2 million to $6.4 million. The earnings-per-share loss of 45 cents, however, was in line with the company's revised estimates of a loss of 45 to 47 cents a share for the period ended September 30.
Last year, the company reported a quarterly net loss of $4.68 million, or 35 cents a share. Analysts had expected a loss of 35 cents a share prior to the warning.
CNET (publisher of NEWS.COM) said previously that the higher-than-expected net loss for the quarter was due in part to higher-than-expected costs associated with the development of new services, primarily the development of COMPUTERS.COM, a new CNET branded service set to launch during the fourth quarter of 1997. The company also sited lower-than-expected revenues.
Revenue was $8.67 million for the third quarter ended September 30, compared with $4.52 million last year. During the second quarter, the company reported revenue of $6.62 million.
Internet advertising revenue for the quarter more than doubled to $6.86 million, from $2.86 million a year ago. Television revenue rose $1.81 million, from $1.65 million.
In announcing a big strategy shift, CNET told investors that it plans to concentrate less on developing new technology publications and more on generating profits in coming quarters. The company previously had told investors it planned to sacrifice profits in the foreseeable future to expand its news organization and to develop new products.
"Beginning in the fourth quarter, we will shift our priorities away from product development to focus sharply on revenue generation, growth and profitability," said Halsey Minor, CNET chief executive.
CNET also announced that Robin Wolaner has been named executive vice president in charge of its technology publishing operation. Wolander was founder of Parenting magazine and former president and CEO of Sunset Publishing. Wolaner will be responsible for the overall operations and management of CNET's network of Web sites and services.
CNET's stock, which traded as high as 46-1/2 in late September, ended today at 29-1/8, up 3-3/8 from yesterday.
Online posted a net loss of $583,000, or 3 cents per share, for the quarter, compared with net profits of $106,000, or 1 cent a share, a year ago. And the company's loss widened over the previous quarter, when it reported a net loss of $226,000, or 1 cent a share.
Revenue for the quarter was $25.1 million, up from $9.2 million a year ago and a 35 percent increase compared with the $18.6 million in revenue reported for the previous quarter.
Earlier this month, the company filed for a secondary offering of 1.7 million shares of common stock. Net proceeds are intended for general corporate purposes geared toward facilitating the company's planned growth.
During the month of September, Onsale's stock gained about 250 percent to hit as high as 35-1/4, but in recent days it tipped back a notch to end today at 28-3/8, off 7/16 from yesterday's close.
The company announced earlier this month that product transition, as well as delays in getting products to market, were the driving forces behind the quarter's shortfall.
Net income for the third quarter of 1997 was $1.64 million, or 10 cents per share, compared with net income of $1.38 million, or 10 cents a share, in the third quarter of 1996.
Revenues in the third quarter of 1997 were $13.72 million, up 132 percent from the $5.92 million reported in the third quarter of 1996.
Despite the revenue and earnings shortfall for the quarter, the company said it is pleased with the deals that it has with OEMs such as Acer, Gateway 2000 and Micron for its Permedia 2 line of low-end graphics processors. Other deals for its high-end processor with Compaq and Dell provide confidence that the company will enter 1998 with a strong product and customer lineup, leaving most of its recent transition difficulties behind, said the company.
The company's stock fell about 50 percent since mid-September, when the stock traded as high as 50. It closed at 24-3/8, up 1-5/8 from yesterday's close.
Reuters contributed to this report.