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24/7 Media misses 3Q targets, lowers outlook and cuts 200 jobs

24/7 Media delivered some terrible news to investors Wednesday when it missed analysts' estimates in its third quarter, announced it would lay off 200 employees and said it only has $23.1 million in cash left in its coffers.

The online advertising and marketing firm posted a loss of $22.5 million, or 59 cents a share, on sales of $48.1 million.

First Call Corp. consensus expected it to lose 47 cents a share in the quarter.

24/7 Media (Nasdaq: TFSM) shares closed off 98 cents to $4.64 ahead of the earnings report.

Including a variety of charges, 24/7 Media posted a net loss of $56.8 million, or $1.49 a share, compared to a net loss of $11.7 million, or 55 cents a share, in the year-ago quarter.

The $48.1 million in sales represents a 98 percent improvement from the year-ago quarter when it lost $7.4 million, or 35 cents a share, on sales of $24.3 million.

However, those sales marked a slight sequential decline from the second quarter when it lost $13.3 million, or 49 cents a share, on sales of $52.2 million.

"We experienced challenging market conditions in the third quarter," said CEO David Moore in a prepared release. "Consistent with our profitability objectives, we initiated a strategic operating plan that we project will result in approximately $20 million in annual savings, putting us on a solid track towards profitability."

Those savings will come mainly from the elimination of 200 jobs by year-end, the company said.

It exited the quarter with cash and cash equivalents on the balance sheet of $23.1 million.

Looking ahead, company officials expect fourth-quarter sales of between $48 million to $56 million, roughly flat to as much as a 15 percent improvement from the third quarter.

It expects to post a loss of between 39 cents to 44 cents a share in the quarter.

Analysts were expecting a loss of 39 cents a share in the fourth quarter.

The stock soared up to a 52-week high of $65.25 in January before plunging to a low of $3.94 in October.

Amazingly, 15 of the 16 analysts still following the stock rate it either a "buy" or "strong buy."