ICG sees higher 2Q losses

2 min read

Internet Capital Group (Nasdaq: ICGE) reported increased second quarter losses as it continued to expand its portfolio of companies.

Shares of ICG slid to 29 1/8 in afterhours activity on the Island electronic communications network, following the company's quarterly report. ICG stock closed Wednesday regular trading at 31 5/8, down 2 13/16 for the session.

After market close Thursday, the business-to-business online investment firm reported a second quarter loss of $186.9 million, or 70 cents per share. ICG lost $11.2 million, or 6 cents per share, in the second quarter a year earlier.

Wall Street analysts generally don't maintain earnings estimates for ICG, whose business model relies on taking large stakes in B2B e-commerce firms.

"It is important for investors to recognize that ICG's financial statements are not a particularly meaningful indicator of ICG's performance," Lehman Brothers analyst Patrick Walravens wrote in a research note released last week.

The companes in ICG's portfolio combined to generate $453 million in second quarter revenue, more than double from $211 million in the comparable period a year ago. That figure was roughly within the range predicted by analysts.

ICG spent $417 million in cash to expand its portfolio during the quarter, including $205 million on 14 new stakes and $212 million to increase 17 already existing investments. Walravens expected ICG to spend between $500 million and $600 million.

The company now has 75 companies in its portfolio, but with the stock market down from its peak earlier this year, ICG's companies are looking at merger and acquisition activity, said Walter Buckley, president and CEO of ICG.

"ICG is vigorously applying its strengths and resources to assist our partner companies in building their operations," Buckley said. "This focus on delivering results is driving consolidation in the B2B market and we expect this to rapidly accelerate over the next several quarters.">