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Digital River sees lower sales in 2Q

Digital River, Inc., (Nasdaq: DRIV) said Thursday sales for the second quarter will miss estimates, but earnings should remain on track.

The company believes it will meet or beat the consensus loss per share estimate for the quarter. First Call's consensus of 8 analysts predicts the company will report a loss of 40 cents a share. But sales for the quarter will be between $30 million to $31.5 million -- lower than the consensus analyst estimate.

Shares closed at 10 1/4 Wednesday, well off their 52-week high of 43 5/8. The stock picked up on a deal with CompUSA deal in January but has seen steep declines since.

"The expected results are related to greater than anticipated seasonality in our Software Services division,'' said CEO Joel Ronning in a press release. "The second quarter is typically slower in the software market and a lack of new product offerings from our client base compounded the situation."

Digital River also said it believes it is on track for profitability before depreciation and amortization in latter 2001.

The company said other positive factors included strong growth in its E-Business Services division and some important new Software Services division clients coming on board in the third quarter. It also expects to see the benefit of new service offerings including expanded volume licensing and purchase order capabilities.