iXL looks toward future after disappointing loss
The Internet consulting company posts fourth-quarter and revenue losses which exclude costs relating to restructuring and noncash expenses.
The Atlanta-based company late Wednesday reported a wider fourth-quarter loss and a decrease in quarterly revenue.
For the quarter ended Dec. 31, 2000, iXL said pro forma net loss came to $46.3 million, or a loss of 61 cents a share, versus net income of $1.1 million, or a profit of 2 cents a share in the same period in 1999. The figures exclude charges including those related to restructuring and other noncash expenses.
There was no First Call consensus estimate for iXL's fourth quarter and only one broker is currently following the company's stock.
In early trading, iXL shares fell 25 cents, or 12 percent, to $1.81 per share. The company, whose shares have dropped nearly 20 percent this month, has hit a 52-week low of 68 cents a share--a far cry from its 52-week high of $54.25.
The demand overall for Internet-related consulting services, fueled by rapid growth of many Web companies, has slowed, primarily because of the downfall of many dot-com clients.
iXL reported revenue for the quarter fell to $52.3 million from $75.1 million in the comparable quarter in 1999. For its fiscal year 2000, iXL reported revenue of $359.3 million, a jump from $216.9 million in the same period a year earlier. Meanwhile, the company posted a fiscal-year pro forma net loss of $88.5 million, or $1.19 per share, compared with iXL's pro forma net loss of $11 million, or 25 cents a share in 1999.
The company, which did not disclose estimates for its upcoming quarter, said that while the second half of 2000 had been a "difficult and disappointing" period, the company is looking to a brighter future. iXL, which detailed restructuring plans during the quarter, said it has sliced its operating expenses by more than half and has scored new consulting engagements.
The company recently tapped ex-PricewaterhouseCoopers partner Christopher Formant as its new chief executive officer. Formant, who most recently led PwC's global banking consulting practice, joined iXL the beginning of this month.
"We plan to invest in our top people and offices, improve the efficiency of our operations and add new talent and capabilities in 2001," Formant said in a statement. "We also believe we will have better visibility on the rest of the year shortly, and that we can become profitable very quickly."
As part of its earlier announced restructuring plan, iXL expects to reach profitability in the first half of this year. Like many companies in its sector, iXL has had to reduce its work force and set cost-cutting measures in an effort to save money amid challenging times.