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CompuServe predicts quarterly loss

Flat growth has led CompuServe to predict a loss of 15 to 20 cents per share.

CompuServe announced today that it expects to lose 15 to 20 cents per share for the quarter ended July 31, attributing the loss to flat subscriber growth and high expenses associated with the introduction of its Wow service for the novice home user.

Despite a licensing deal with Niftyserve that brought in 1.8 million subscribers, a large number of cancellations from new members kept total growth flat over last quarter at 3.4 million. Subscribers to Wow grew 44 percent to 91,000 users, and subscribers to its Sprynet Internet service grew 14 percent.

Separately, the board of director's for CompuServe's parent company H&R Block decided to offer its remaining 80.1 percent interest in the online service available to the public by November. CompuServe became an independent, publicly traded company in February, but only 20 percent of H&R Block's interest in the company was put on the block. Now, as expected, all the rest will go as well and might help offset the losses incurred this quarter.

In the meantime, the company will adopt a number of cost-cutting measures, including eliminate unspecified "under-performing assets."

Related story:
CompuServe goes public