Strong traffic, sales propel Go2Net past 3Q forecasts

Community Web site developer Go2Net Inc. (Nasdaq: GNET) beat Street estimates by 2 cents a share in its third quarter Thursday, pocketing $3 million, or 7 cents a share, on sales of $5.7 million.

Its shares closed up 1 5/16 to 77 3/4 ahead of the earnings report.

First Call consensus expected the Seattle-based company to earn 5 cents a share in the quarter.

The $5.7 million in sales represents a jump of 191 percent compared to the year-ago period when it lost $160,000, or 1 cent a share, on sales of $2 million.

More impressive, gross profit margins improved to 79 percent versus 65.4 percent in the year-ago period.

Earlier this quarter, Go2Net received a $300 million cash infusion from Paul Allen's Vulcan Ventures.

"Several months ago, we publicly stated our company goal of becoming a Top 10 Web property by the end of calendar year 1999," said CEO Russell Horowitz in a prepared release. "We're very pleased to have reached this milestone ahead of schedule.

"With the Paul Allen and Vulcan Ventures $300 million investment and with the significant internal growth rates of our narrowband services, we look forward to extending Go2Net's proven strategy onto the broadband platform being developed by Paul Allen and Vulcan Ventures."

Last quarter, Go2Net easily topped analysts' estimates, earning $305,000, or 4 cents a share, on sales of $3.1 million.

In the quarter, Go2Net's traffic jumped to 18.5 million page views per day in June, up 50 percent sequentially from the 12.3 million page views recorded in March.

Go2Net shares hit an all-time high of 99 1/2 in April after falling to a low of 3 3/16 in September.

All four analysts following the stock rate it either a "buy" or "strong buy."

First Call consensus expects it to earn 14 cents a share in the fiscal year.