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DoubleClick expected to post strong results

    Many analysts expect DoubleClick (Nasdaq: DCLK) to deliver a first quarter upside surprise Monday after market close.

    DoubleClick is expected to report a net loss of 11 cents a share, according to the consensus of First Call's poll of 23 analysts. Many analysts are expecting strong sales.

    Shares in the company closed at 60 9/16 Friday, down considerably from its 52-week high of 135 1/4. The stock felt pressure from privacy issues earlier in the year, but revived after analysts said the weakness should be seen as a buying opportunity.

    "There's potential for 10 to 20 percent upside on revenue based on traffic metrics," said H. Perry Boyle, an analyst with Thomas Weisel Partners L.L.C. who holds a "strong buy" rating on the stock, and predicts earnings per share will come in at a loss of 9 cents a share, narrower than the consensus estimate. He sees system-wide revenue at around $108.9 million, to be reported net revenue at about $90.7 million.

    "Even though the first quarter is seasonally the weakest, strong growth in the number of ads served should overcome that seasonality," said David Doft, an analyst for ING Barings. He also expects the company to do slightly better than expected. His official estimates are for a loss of 11 cents a share, and $95 million in revenue, an increase of 142 percent over last year.

    "The online privacy debate does not impact DoubleClick's current business model, and we believe all of DoubleClick's businesses are growing strongly," said Merrill Lynch analyst Henry Blodget in a report.

    Blodget recommends investors focus on six operating metrics, revenue, EPS, gross margin, total ads served by DART, total ads sold by the Doubleclick networks and total revenue from CMGI's AltaVista.

    Blodget's estimates call for revenue of $122 million, or 7 percent sequential growth, a loss of 9 cents a share, 99 billion ads served by DART, 18 billion total network ads sold, and $27 million in total revenue derived from AltaVista, down from $29 million in the fourth quarter.

    "While the stock usually trades off after it releases earnings, DCLK is down 40 percent from its 52-week high and we do not see much more downside," Blodget added. He said the stock is one of an elite few market leaders, and shares could be substantially higher by the end of 2000.

    The company's competitors include Engage (Nasdaq: ENGA) 24/7 Media (Nasdaq: TFSM) and Flycast Communications, a subsidiary of CMGI (Nasdaq: CMGI)


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