Egghead.com beats the Street
The online computer hardware and software vendor is reporting a first-quarter loss of $10.5 million, or 34 cents a share, beating Wall Street's expectations.
The report comes two weeks after the company announced plans to merge with Onsale. The combined company plans to operate under the Egghead.com name.
The company's results beat First Call's consensus estimate, which was a loss of 42 cents per share, by 8 cents.
Despite beating expectations, Egghead.com's report was a mixed bag compared with previous quarters. It shows that the company still is establishing itself as an online retailer after closing its brick-and-mortar stores.
The company reported revenues of $40.6 million for the quarter. That number was up 37 percent from the first quarter of last year, when it reported $29.5 million in revenue. However, it represented a slight downturn from Egghead.com's previous quarter, when it reported $42.2 million in revenue.
And while the company's losses are less than the $13.7 million posted in the fourth quarter last year, losses far exceed a first-quarter 1998 loss of $5.5 million.
A company spokesperson said the first quarter of its fiscal year is traditionally its slowest quarter. Meanwhile, company chief executive George Orban said the company's financial results had not forced the merger with Onsale.
"I don't think the merger was necessary per se," Orban said. "The company has been evolving in a deliberate way since we moved to the Web."
Orban added that Egghead.com stood to gain a number of advantages through the merger, including better pricing from vendors and a larger customer base. Calling further consolidation in the industry "inevitable," Orban said that Egghead.com's move placed it at the "vanguard" of that trend.
Egghead.com lost $34.4 million last year on $149 million in sales. Last year was the first year that all of its reported income came from the company's online operations. Previously, the company operated a nationwide network of land-based stores, which the company closed to focus on its online operations.
Egghead.com closed today up 0.0625 to 9.21875.