Internet consulting firm Viant dealt its investors a crushing blow late Thursday, warning that it will post a loss in its third quarter on lower-than-expected sales.
Viant (Nasdaq: VIAN) shares closed off 5/8 to 13 7/8 ahead of the profit warning. The stock fell to 10 3/8 in after-hours trading.
First Call Corp. consensus was expecting Viant to return a profit of 8 cents a share in the quarter.
Company officials said it expects third-quarter sales to fall between 12 percent to 15 percent from the $38.5 million it recorded in the second quarter.
"We are disappointed with our expected financial performance for the third quarter, which reflects the combination of a number of factors," said CEO Bob Gett in a prepared release. "The expected revenue shortfall is primarily attributable to the changing market environment from the dot-com driven demand of past quarters to a strong, but more deliberate decision-making process, especially for Global 2000 companies."
Gett also said the company didn't ramp up its sales and marketing forces fast enough to keep pace with the shifting market environment.
Making matters worse, its dependency on new, cash-strapped Internet firms came back to haunt it.
"Many of our existing dotcom clients were unable to gain the additional funding they had expected to convert to follow-on projects that we were forecasting," Gett said in the release.
Earlier Thursday, Lehman Brothers analyst Karl Keirstead trimmed his 12-month price target to $30 a share from $50 a share and lowered his third-quarter and fiscal 2001 revenue estimates to $42 million and $245 million, respectively.
"Visibility has deteriorated and the demand mix may be shifting," Keirstead wrote in a research note.
Last quarter, Viant topped analysts' estimates when it posted a profit of $6.3 million, or 11 cents a share, on sales of $38.5 million.
Viant officials said they were "cautiously optimistic" that sequential revenue growth will resume in the fourth quarter.
Viant will release its third-quarter results during the week of Oct. 23.
Its shares hit a 52-week high of 63 9/16 in December before falling to a low of 13 5/16 earlier this week.
All 17 analysts following the stock rate it either a "buy" or "strong buy."