Open Market to miss 3Q estimates, restructures

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Open Market, Inc. (Nasdaq: OMKT) said Tuesday that it expects third quarter earnings to miss estimates. The company also announced plans to restructure, laying off 150 workers, and attempting to bring it to profitability by the second half of 2001.

Shares in the e-commerce software maker were unchanged at 3.94 Tuesday morning, well below their 52-week high of 65.50.

The company also warned it would miss estimates in its second quarter.

Net revenue for the third quarter is expected to be at or below $23.5 million. Net loss from operations for the third quarter is expected to be "at least" 25 cents a share. First Call was expecting a loss of just 14 cents a share.

Lower-than-expected results were caused by a continuing decline in Transact revenues as well as the ongoing realignment and expansion of the North American sales organization, the company said.

While it will not be profitable in the fourth quarter, as planned, its restructuring plan has, as a priority, profitability in the second half of 2001, officials said.

The restructuring plan will slash 150 positions, including 80 employees and 70 contractors. An associated charge of $6 million to $7 million will be recorded in the fourth quarter, which includes goodwill of about $3.3 million. This charge is intended to reduce expenses by $3 million to $4 million per quarter.

Open Market said it was working to shift its professional services organization to higher-margin design assurance services for partners, and is in talks with parties interested in buying ShopSite, its online store builder product.

Open Market is scheduled to release results for its third quarter on October 19, and will give more details on the restructuring at that time.