Cambridge Technology Partners Inc. (Nasdaq: CATP) said Thursday fourth quarter net loss was 28 cents a share, slightly narrower than First Call's expected loss of 30 cents a share. The company said it sees more losses in 2000 as it revamps its e-business strategy.
Shares in the global e-business services provider closed at 18 Wednesday, well below their 52-week high of 31 7/16. But the stock has improved dramatically since its low point in November, when the company's CFO resigned.
Fourth-quarter revenue was of $145 million versus $160.2 million for the same period of 1998. Net loss for the same three months ended December 31 was $17.3 million, or 28 cents a diluted share, versus $16.3 million, or 26 cents a diluted share for the same period the prior year. Not included in these results in a gain of $23.7 million, or 24 cents a diluted share, from Cambridge's share in the Cambridge Technology Capital Fund.
The company also released results for the year: revenue for 1999 reached $628.1 million versus $612 million in 1998. Net income for the year was $2.1 million, or 3 cents a diluted share, versus $51.9 million, or 83 cents a diluted share for 1998.
The company said expenses jumped because of increased salary requirements and bonuses in the competitive labor market, and costs associated with increased idle time at its facilities. In 1999, operating costs were $660.1 million versus $531.0 million in 1998. Cambridge is facing stiff competition from the likes of upstarts such as USWeb/CKS (Nasdaq: USWB), iXL (Nasdaq: IIXL) and Agency.com (Nasdaq: ACOM). Net services companies have soared on Wall Street (see chart).
The company said it will continue to rack up losses in 2000 as it invests in two reclassified lines of business: E-business and e-integration. Cambridge will invest about $20 million in systems infrastructure, and training to support its new strategy. The company said its losses will continue in the first half of 2000 based on flat revenues compared to the first half of the prior year.
Cambridge plans to build an entirely new company, one solely focused on accelerating clients' evolution into new economy leaders, the company said, citing growth in its e-business products, while the end of Y2K worries led to a decline in other software sales. Demand for Cambridge's e-business software led to an increased to about $243.3 million or 39 percent, of total revenue, versus $190.9 million or 31 percent last year.