Netscape stock falls, rebounds

Shares of Netscape fall more than 12 percent in morning trading before rebounding slightly.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
Shares of Netscape (NSCP) fell as low as 11.8 percent in today's trading before rebounding slightly following the company's release yesterday of disappointing fourth-quarter results.

Netscape shares fell as low 14-7/8 in early morning See special coverage: Netscape's sea change trading, before ending the day at 16-13/16, down 1/16 over yesterday.

The Internet software company posted a larger loss than Wall Street had expected, and said also that it would lay off 9.4 percent of its workforce, or 300 employees, by the end of March.

Netscape posted a net loss of $88.3 million for the quarter, compared with a profit of $8.2 million posted a year ago. Although a large portion of the loss was from restructuring and acquisition charges, the company also was hit with slower-than-expected sales in its client and corporate software product lines.

Revenues reached $125.3 million for the quarter, up from $115.2 million a year ago.

Out of the 11 analysts that report their expectations to First Call, all 11 have revised downward their Netscape estimates for the current quarter. The consensus earnings-per-share estimate for Netscape's current quarter is a 10-cent-per-share loss. For fiscal 1998, analysts are expecting the company to break even.

Today's market activity has resulted in some changes in analyst recommendations as well. Two firms downgraded Netscape to "hold," one from "strong buy" and the other from "weak buy."