Loss widens in 2Q for theglobe.com

2 min read

theglobe.com (Nasdaq: TGLO) reported a second quarter loss wider than the year before but narrower than predicted by one analyst.

After market close Thursday, the online community network reported a second quarter loss of $10.2 million, or 33 cents per share, excluding amortization and a one-time restructuring charge. Although First Call has no published consensus estimate for theglobe.com, Wit Capital analyst Jordan Rohan last month predicted a loss of 39 cents per share for the quarter ended June 30.

Shares of theglobe.com traded at 1 3/4 in afterhours activity on the Island electronic communications network, immediately following the quarterly report. The stock closed Thursday's regular trading at 1 5/8, up 1/16 for the session.

Second quarter pro forma losses widened from the comparable period a year earlier, when theglobe.com reported a pro forma loss of $6.7 million, or 27 cents per share. Company losses also grew from the first quarter, when theglobe.com lost $8.9 million, or 31 cents per share.

Including $7 million in goodwill writedowns and $15.6 million in costs from closing its Seattle e-commerce unit, theglobe.com lost $32.7 million, or $1.07 per share in the second quarter.

Those higher losses came even as second quarter revenue rose 103 percent year-over-year, to $8.4 million from $4.1 million in the year ago period. Advertising revenue rose 33 percent sequentially.

Gross margin rose to 44.1 percent in the second quarter, compared to 36.8 percent in the first. The company's pro forma net loss has fallen as a percentage of revenue in recent quarters, to 121 percent from 172 percent in the fourth quarter and 127 percent in the first quarter.

"theglobe.com has a clear plan for achieving profitability, and our second quarter results demonstrate that we are clearly on track under this plan," CFO Frank Joyce said. "Additionally, we ended the quarter with a solid cash and short-term investments position of over $32 million and we remain strictly focused on significantly reducing our cash burn rate by the fourth quarter of this year."

The company noted it has beaten analyst estimates for seven straight quarters.

However, First Call has no published consensus forecast for theglobe.com. And analyst estimates were lowered in the third quarter of 1999 after the the company warned of lower-than-expected sales.>