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Modem Media crushes 1Q forecasts

Modem Media (Nasdaq: MMPT) tore past analyst estimates in the fourth quarter.

After market close Tuesday, the online website builder and marketer reported fourth quarter income of $1.6 million, or 13 cents per share. First Call's survey of four analysts predicted a profit of 5 cents per share for the quarter ended Dec. 31.

Shares of Modem Media traded as high as 102 in afterhours activity on the Island network. The stock closed Tuesday's regular trading to 96 3/8, a gain of 8 3/8 for the session.

Fourth quarter revenue more than doubled year-over-year to $24.5 million, which represented a 16 percent improvement sequentially. Margins after salaries and benefits increased to 44.4 percent, flat sequentially and up from 29.4 percent in the year ago period.

For the full year, Modem Media earned $3 million, or 26 cents per share, on revenue of $74 million. Sales in 1999 gained 74 percent from 1998. "We've built strong momentum for 2000 and we anticipate our fiscal 2000 annual percentage growth rate to reach the same level as fiscal 1999," said G.M. O'Connell, chairman and CEO.

Average annualized revenue from Modem Media's top 10 clients rose to $6.8 million from $3.7 million in the fourth quarter, although those clients fell as a percentage of total revenue to 69.8 percent.

International revenue in the fourth quarter rose to $5.3 million, a 238 percent gain year-over-year and a 50 percent improvement sequentially.

The company reported $4.1 million in earnings before interest, taxes and amortization, an 11 percent gain from the third quarter. Cash earnings per share rose to 20 cents per share, compared to a loss of 8 cents per share in the fourth quarter of 1998.

Another e-business consulting and services firm, Razorfish (Nasdaq: RAZF), also reported fourth quarter results on Tuesday. Razorfish beat Wall Street consensus in earning $5.8 million, or 6 cents a share, on sales of $52.7 million.>