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CNET exceeds 1Q expectations, sees profit for 2000

CNET Networks (Nasdaq: CNET) posted a profit and easily hurdled consensus estimates in the first quarter.

After market close Wednesday, the online provider of technology news and information reported first quarter net income of $1.5 million, or 2 cents per share, excluding amortization and one-time events. First Call's survey of 14 analysts predicted a loss of 6 cents per share.

Including expenses for goodwill writedowns, merger-related costs, net losses on stock sales and charges related to stock options, CNET lost $19.5 million, or 23 cents per share.

Earnings should continue, CNET said. The company expects an operating profit, excluding amortization, on revenue of more than $200 million for the full year 2000. Previously, CNET did not foresee operating income until the fourth quarter of this year.

First quarter revenue rose 126 percent year-over-year to $45.4 million. Revenues for the core CNET business grew to $43.6 million, up 117 percent from $20.1 million in the year-ago period. The recently acquired comparison shopping service generated revenue of $1.8 million, up 40 percent sequentially.

Gross margins rose to 63 percent from 57 percent a year earlier.

The company's websites delivered a daily average of 16.5 million page views during the quarter. About 218,000 per day were generated for CNET's 400-plus merchant partners, the company said.

Also Wednesday, CNET said its board approved a plan to buyback up to $100 million of stock. That could force CNET to use purchase accounting for the mySimon acquisition rather than a pooling of interests. The purchase method may result in higher amortization costs.

CNET is a competitor of ZDNet (NYSE: ZDZ).

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