Excite plans offering despite loss
Excite, which is testing the waters for a secondary stock offering, hopes its first-quarter results will give a boost to its efforts.
Its net loss for the first quarter was $8.8 million, or 72 cents per share, compared with a net loss of $5.6 million or 50 cents a share for the same quarter a year earlier.
The company, however, would have posted a loss of $4.5 million, or 37 cents a share, without a $4.3 million merger and acquisition charge in the quarter. Wall Street had not expected the charge to be so accelerated, according to Rick Redding, Excite's executive vice president of finance and administration.
Despite the year-over-year expanding loss, the search engine company showed an improvement from the previous quarter's loss due to higher revenue and lower marketing expenses, according to Excite.
The company reported its results after the market closed today, but prior to the announcement, its stock dropped over 4 percent to close at 11-1/2, down from Friday's close of 12.
Revenue for the quarter was $7.5 million, up from $1.4 million reported in the corresponding first quarter of 1996 and up 15 percent from revenue of $6.5 million reported in the fourth quarter.
Excite has seen a roller coaster of a quarter as its share price doubled within a month to 21-1/8, only to lose most of those gains.
Wall Street was expecting the company to report a loss of 43 cents a share, according to First Call. In the last month, analysts have been revising their estimates downward, according to a First Call spokesman.
Excite last quarter lost $12.7 million, or $1.06 per share, which included a $4.3 million charge for its acquisition of rival search engine WebCrawler from America Online. Analysts had expected a loss of 48 cents a share.
The company's revenues, however, had been up 61 percent to $6.5 million in the fourth quarter compared with a year ago.
Excite, which filed for its secondary offering March 3, is also gauging the market's momentum to determine whether to offer 2.3 million shares of common stock to the public market.
The effort makes Excite the first of the search engine companies to file for a secondary offering, and its ultimate success or failure will help outline the path that other search companies hope to tread.
"Excite's secondary offering may reenergize the sector," president of New Jersey-based IPO Financial Network David Menlow told CNET's NEWS.COM in a previous interview.
Digital Equipment's search division, AltaVista, filed for a IPO last August. "We are trying to get market timing right," company CFO Bob Hult said. "There is no firm date, but it will be within next year."
Menlow added that AltaVista's wait for an appropriate valuation depends on how investors receive the Excite offering.
During the quarter, Excite announced Email Lookup and People Finder, features that tap a database of email addresses, home addresses, and phone numbers.
Excite also released NewsTracker, a free news-clipping service for the Web, to rev up profits.
The service lets users search its database of more than 300 publications, track up to 20 news topics, or browse news categories. NewsTracker also has so-called intelligent agent software to help users customize information that is received.
The moves serve as examples of how the company is looking to generate additional revenues on the Web, Excite senior vice president Joe Kraus said previously.