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DoubleClick slides despite upgrade

DoubleClick shares fell 4 7/16, or 7 percent, to 55 3/8 Tuesday, one day after the Internet advertising firm met analysts' estimates in its first quarter.

In the quarter, DoubleClick (Nasdaq: DCLK) posted a loss of $13.2 million, or 11 cents a share, on sales of $110 million.

First Call consensus expected the Internet advertising firm to lose 11 cents a share in the quarter.

On Tuesday, CS First Boston upgraded the stock from a "buy" recommendation to a "strong buy."

The $110 million in sales was almost triple the amount it recorded in the year-ago quarter when it lost $6 million, or 6 cents a share, on sales of $39.4 million.

However, operating expenses climbed to $89.5 million from $33.1 million.

Making matters worse for DoubleClick, it's currently under investigation for its information-gathering practices.

Including amortization and non-cash charges, DoubleClick lost $18.4 million, or 16 cents a share, compared to a loss of $8.5 million, or 8 cents a share, in the year-ago period.

Ahead of the earnings report, Internet analysts had made some optimistic forecasts.

"The online privacy debate does not impact DoubleClick's current business model, and we believe all of DoubleClick's businesses are growing strongly," said Merrill Lynch analyst Henry Blodget ahead of the earnings report.

Blodget predicted it would record total sales of $122 million and a loss of 9 cents a share.

"While the stock usually trades off after it releases earnings, DCLK is down 40 percent from its 52-week high and we do not see much more downside," Blodget said. He said the stock is one of an elite few market leaders, and shares could be substantially higher by the end of 2000.

DoubleClick shares hit a 52-week high of 135 1/4 in January after falling to a low of 30 1/4 in April.

Twenty-three of the 24 analysts following the stock maintain either a "buy" or "strong buy" recommendation.

Analysts are expecting a loss of 6 cents a share in the fiscal year.

THE DAY AHEAD: DoubleClick's FTC flap pits privacy vs. profit
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