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Webvan tumbles, goes with it

Online grocer Webvan (Nasdaq: WBVN) and its merger partner (Nasdaq: HOMG) both tumbled after reporting quarterly results.

Webvan posted a wider-than-expected loss in its second quarter Thursday, losing $57.1 million, or 17 cents a share, on sales of $28.3 million. First Call Corp. had predicted Webvan would lose 16 cents a share in the quarter. Webvan was down 1 13/16 to 7 1/2, or 19 percent. was off 1 1/8 to 6 7/8.

Earlier this quarter, Webvan announced it would buy in a stock swap valued at $1.2 billion. The combined companies are expected to have revenue of $300 million to $325 million in 2000, and revenue of $1.1 billion to $1.2 billion in 2001.

But all that promise hasn't materialized yet. also reported hefty second quarter losses.

For the second quarter,'s loss from operations was $50.2 million or 43 cents a share before stock-based compensation and costs associated with the proposed Webvan merger, better than analysts' consensus expectations of a loss of 44 cents per share.

The company said net revenue rose 40 percent to $29.8 million, exceeding consensus analysts' estimates and increasing 766 percent over year-earlier revenue of $3.4 million.

Gross profit margins were 25.1 percent of net sales versus 17.4 percent in the first quarter and 18.4 percent in the year-ago quarter.

The second-quarter costs associated with the proposed merger with Webvan were $1.5 million, or a penny a share, comprised principally of investment banking, legal, and accounting fees. At July 1, had $158.6 million of unrestricted cash or securities on its balance sheet.

Expansion into new markets helped drive the company's quarterly revenue growth, said. The company said it also launched several initiatives designed to continue its drive towards profitability within its existing facilities and optimization of capital.