The Web portal operator and online media company said Tuesday it expects break-even results in the fourth quarter of 2001 or in early 2002. The company reiterated its previously stated estimate, calling for 2001 revenue of $100 million, but added that it now expects first-quarter sales of $16 million.
Analyst consensus was predicting first-quarter revenue of $25 million, according to earnings tracking firm First Call. Shares of NBCi traded at $2.88 in after-hours activity on the Island ECN after the report. NBCi stock fell 16 cents to $2.60 in Tuesday's regular trading ahead of the news.
Assuming NBCi hits the $16 million figure in the March period, the company has to roughly double its quarterly revenue by the fourth quarter to reach its full-year sales target of $100 million, said Justin Post, analyst with Deutsche Banc Alex Brown. "Their numbers in the quarters further out this year are going to be even more of a challenge than we thought," Post said. "The company is really going to have to execute."
NBCi now expects to lose 65 cents to 75 cents per share in the first quarter. Company executives predicted a loss of $2.05 to $2.25 per share in 2001. First Call consensus predicts a full-year loss of $2.17 per share on revenue of $112.35 million.
NBCi reported a fourth-quarter loss of $46.9 million, or 74 cents per share, excluding special charges. The company generated fourth-quarter revenue of $31 million. Analyst consensus predicted a loss of 81 cents per share on revenue of $32.96 million, according to First Call.
Few were surprised that NBCi's fourth-quarter revenue and first-quarter forecast came in lower than analysts' published estimates. "It's not anything different from what we've heard from Yahoo or iVillage or any of those Internet advertising-based models," said Kathleen Heaney, analyst with BlueStone Capital Partners. "It's a macroeconomic call, really."
Fourth-quarter revenue increased 14 percent year over year. Advertising revenue was $26.1 million for the fourth quarter. E-commerce revenue was $4.9 million. The company has been hit especially hard because of its client mix, Post said.
"It just shows how difficult the Internet economy has become for people with dot-com exposure and barter exposure," he said. "NBCi is definitely on the high end of that."
Barter business--an exchange of advertising for equity--was 46 percent of fourth-quarter revenue.
Pure Internet companies accounted for 59 percent of total advertisers, and 68 percent of total advertising revenue, CFO Anthony Altig said during an afternoon conference call with analysts. Both percentages were down from the third quarter and will continue to decrease, Altig said.
"Given the slowdown in the ad market, it's more important than ever for us to keep an eye on the big picture," CEO Will Lansing said. "Internet advertising today accounts for only a small fraction of total ad dollars, and long-term growth projections remain strong. By reaching breakeven before noncash charges and NBC promotion within the next year, NBCi will be in a solid position to be successful in the long run." NBCi plans to cut unprofitable businesses such as product sales, Lansing told analysts.
Including amortization costs, equity-related losses and other one-time charges, NBCi in the fourth quarter lost $245 million, or $3.89 per share.
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