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Keynote sees 1Q revenue letdown, cuts 2001 guidance

Keynote Systems (Nasdaq: KEYN) sees lower-than-expected earnings and revenue for fiscal 2001.

After market close Thursday, the provider of services for measuring e-commerce and Web server performance said it expects to earn 44 to 46 cents per share in the current fiscal year, on revenue of $50 million to $52 million. First Call's poll of analysts was predicting a profit of 54 cents per share on revenue of $74 million, for Keynote's fiscal year ending Sept. 30.

Excluding special charges, first quarter earnings will be in line with First Call's consensus expectation of 11 cents per share, Keynote said. The company expects to report first quarter revenue of $13 million to $13.2 million, less than the $14.3 million forecast by First Call.

Shares of Keynote traded at 12.5 in afterhours activity on the Island electronic communications network, following the preannouncement. Keynote fell 0.6875 to 16.9375 in Thursday's regular trading ahead of the news.

Executives blamed the revenue letdown on a decline in revenue from Internet service providers, which generate about 25 percent of the Keynote's business. The company also has been hurt by weakness among pure Internet companies, said Umang Gupta, chairman and CEO.

Keynote's first quarter business from corporations, resellers, consultants and load-testing customers grew 15 percent from the fourth quarter. "Our long-term business outlook remains positive," Gupta said.>