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VerticalNet tops 4Q estimates, splits stock

VerticalNet Inc. (Nasdaq: VERT) posted a smaller-than-expected loss in its fourth quarter Tuesday, losing $15.2 million, or 28 cents a share, on sales of $10 million. It also announced a 2-for-1 stock split.

First Call consensus expected VerticalNet to lose 34 cents a share in the quarter.

The stock closed up 13 7/8, or 6 percent, to 252 1/8 ahead of the earnings report.

In the year-ago quarter, it lost $5.2 million, or 21 cents a share, on sales of $1.2 million.

"This was a remarkable quarter to cap off our first year as a public company," said CEO Mark Walsh in a prepared release. "We added or improved the core capabilities and businesses we need to continue to extend our lead in B2B e-commerce in the years ahead, with three acquisitions and a number of key alliances with strategic partners."

For the year, VerticalNet lost $53.4 million, or 96 cents a share, on sales of $20.3 million compared to a loss of $13.6 million, or 63 cents a share, on sales of $3.1 million in fiscal 1998.

Separately, Vertical announced that co-founder Michael Hagen will assume the role of chief operating officer.

VerticalNet ended the year with 55 vertical industrial trading communities in its portfolio, up from 29 at the end of 1998.

The number of storefront customers grew to 1,795, an increase of 144 percent year-over-year; and storefronts grew to 2,903, an increase of 121 percent year-over-year. Revenues from e-commerce grew from $475,000 for the third quarter to $628,000 in the fourth quarter.

Earlier Tuesday, VerticalNet announced it will be the majority shareholder in a new venture with British Telecom and Internet Capital Group that will create a $227 million business-to-business Internet company, to be called VerticalNet Europe.

British Telecom Plc (NYSE: BTY) said Tuesday the joint venture with VerticalNet and Internet Capital Group Inc (Nasdaq: ICGE) will set up Internet business communities across Europe enabling companies to trade information and products. As part of the deal, VerticalNet Europe and BT have also agreed to simultaneously create a British venture, VerticalNet UK Ltd.

BT, which will own 33 percent of the venture, saw shares close at 196 Monday. The company also has a deal with AT&T (NYSE: T) for an Internet Protocol (IP)-based network for global electronic commerce.

VerticalNet shares moved up to a 52-week high of 289 9/16 in January after falling to a low of 17 3/8 in August.