Netzee (Nasdaq: NETZ) lowered its targets for fourth quarter and 2001, and sees profitability further off than before.
After market close Thursday, the provider of online banking services for community banks and credit unions said it now sees 2001 revenue ranging between $32 million and $36 million, down from previous expectations. The company also forecast a fourth quarter loss, excluding special charges and amortization, of $4.1 million, or 17 cents per share, on revenue of $7.3 million.
First Call's survey of two analysts predicted a fourth quarter loss of 13 cents per share.
Netzee now sees positive cash earnings in the first quarter of 2002. Analysts had been expecting the company to generate a profit by the third quarter of 2001.
Company executives blamed a slowdown in sales and implementations during the second half of this year on lower confidence among customers, because of the decline in stock prices for Internet stocks, particularly Internet banking issues.
After going public more than a year ago, Netzee rose as high as 31 before plummeting for most of this year. Shares of Netzee rose 0.0625 to 1.0625 in Thursday's regular trading, prior to the latest announcement.
The company also said adoption of Internet services by community banking and credit union customers has fallen short of industry projections, and trails the adoption rates seen by large banks. At the same time, cheaper prices for Internet access forced Netzee to abandon any expectation of making money in the ISP segment.
"Our projections for 2001 provide a conservative but realistic assessment of Netzee's ability to meet upcoming operating challenges," CEO Donny R. Jackson said. "We remain firmly committed to the community financial institution market, which we believe provides an extremely viable business opportunity for our company."
Although Netzee plans to cut costs and put in new plans to boost adoption, the company said it will need more financing. "We remain confident that with more than 900 financial institutions contracted on one or more of our Internet products, we have an established franchise that will enable us to obtain the necessary funding," Jackson said.>