DoubleClick: Web ad market isn't improving
After the online advertising company beats lowered estimates for its second quarter, reporting a net loss of $37.9 million, executives say they see no second-half recovery.
"We don't see a second-half recovery," said Stephen Collins, chief financial officer of DoubleClick.
Collins spoke to analysts on a conference call Tuesday after DoubleClick released second-quarter results that beat the consensus earnings forecast by a penny. DoubleClick reported a second-quarter net loss of $37.9 million, or 29 cents per share. Excluding special charges, the online advertising company lost $9.5 million, or 7 cents per share.
The First Call consensus predicted a second-quarter loss of 8 cents per share for DoubleClick, with individual estimates ranging from a loss of 6 cents to 9 cents per share.
Shares of DoubleClick traded at $11.65 in after-hours activity on the Island ECN following the report. DoubleClick fell 74 cents to $12.02 in Tuesday's regular trading ahead of the news.
Second-quarter revenue fell 20 percent year-over-year to $101.9 million. The analyst consensus predicted revenue of $101.6 million, according to First Call.
Although DoubleClick is taking market share from rivals, the overall industry remains in a slump. Growth in online ads has plummeted since early 2000. Ads from technology and finance companies have been especially weak, down 50 percent from last year, Collins said.
DoubleClick's "best scenario" calls for growth to resume in the middle of 2002, Collins said.
The company's TechSolutions unit boosted second-quarter revenue 6.4 percent year-over-year to $51.8 million. Volume on DoubleClick's DART ad delivery service was down 7 percent in the second quarter, Collins said.
Revenue in DoubleClick's data business rose 22 percent year-over-year to $19.3 million, but its media unit's revenue fell 51 percent to $33.8 million.
Third quarter and beyond
DoubleClick stood by the consensus analyst forecast calling for a loss of 9 cents per share in the third and fourth quarters combined. Third-quarter revenue will be between $96 million and $101 million, DoubleClick said. The average analyst prediction was $108.1 million in revenue for the third quarter.
Analysts expected no surprises from DoubleClick. "We believe an in-line quarter is already (factored) in the stock," Merrill Lynch analyst Henry Blodget wrote in a preview of DoubleClick's report.
DoubleClick did not warn of an earnings disappointment for the second quarter, but expectations for the year were low to begin with, analysts said.
Online advertising growth has slowed dramatically since early last year.
"The online advertising market appears to be stabilizing, but we believe it will continue to remain challenging for the foreseeable future," Blodget wrote.