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DoubleClick posts smaller-than-expected loss, lowers outlook

DoubleClick posted a smaller-than-expected loss in its first quarter Thursday but warned that it would post a wider-than-expected loss in its second quarter and in fiscal 2001.

In the quarter, the online advertising and interactive marketing services provider lost $10.5 million, or 8 cents a share, on sales of $114.9 million.

First Call consensus pegged DoubleClick for a loss of 9 cents a share on sales of $108.5 million.

The $114.9 million in sales marks a 4 percent improvement from the year-ago quarter when it lost $13.2 million, or 11 cents a share, on sales of $110 million.

DoubleClick (Nasdaq: DCLK) shares closed off 61 cents to $12.01 before falling to $10.90 in after-hours trading.

Looking ahead to the second quarter, DoubleClick told investors to expect a loss of between 5 cents and 7 cents a share on sales of between $100 million and $105 million.

Analysts were projecting a loss of 2 cents a share on sales of $118.7 million.

For fiscal 2001, company executives are now anticipating a loss of between 18 cents and 22 cents a share on sales of between $425 million and $450 million, well below the First Call consensus estimate calling for a profit of 3 cents a share on sales of $524.4 million.

The current and projected losses come amid the widespread closing of dot-com companies and the subsequent drop off in online advertising.

Earlier this quarter, DoubleClick unveiled a restructuring plan that would eliminate 10 percent of its work force.

In the quarter, DoubleClick absorbed a $29 million restructuring charge.

"We have taken the steps necessary to stay lean and mean," said Chief Financial Officer Stephen Collins in a prepared release. "As the economy recovers and advertising dollars are allocated more and more to online media, DoubleClick will benefit enormously. We have the resources and staying power to stay on top."

In the first quarter, DoubleClick's technology business posted total sales of $54.9 million, up 38 percent from the year-ago quarter.

Data sales, which include its marketing databases products, chipped in $18.2 million in sales, up 24 percent from the year-ago period.

The closely watched advertising business checked in with sales of $46.1 million, down 23 percent from the year-ago quarter.

While some analysts were concerned about DoubleClick's quarter following Yahoo's (Nasdaq: YHOO) tepid first-quarter results, the improved technology sales illustrate the company's commitment to lessening its dependence on online advertising sales.

Lisa Haas, an analyst at Wit SoundView, said technology sales will be a key source of sales and profits in future quarters.

"DoubleClick is clearly the leader among its peers and, in our view, will use its position to gain market share," she said in a research note. "While it will likely detail continued weakness in its media business, there is potential for upside in its technology business."

David Doft, an analyst at ING Barings, pegged DoubleClick for a loss of 10 cents a share in the quarter on sales of $104 million.

"Given our belief that DoubleClick's share price already reflects a difficult online advertising environment and that we expect to continue to see the demise of its second-tier competitors, we find DoubleClick's shares attractive for the long term," he said in a research note.

International sales accounted for 28 percent of sales this quarter, with particularly strong sales in Japan and China, company executives said.

The company also set a date for the initial public offering of DoubleClick Japan. The offering is expected to raise between $16 million and $28 million for DoubleClick Japan, and is expected to be completed by April 25.

Last quarter, DoubleClick posted a modest profit of $216,000, or break-even on a per-share basis, on sales of $132.3 million.

Its shares rallied to a 52-week high of $88.50 last April before swooning to a low of $8 in December.

Fifteen of the 22 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.