Gifts for $25 or Less Spotify Wrapped Neuralink Brain Chip Black Hole Burps Light of 1,000 Trillion Suns Stamp Price Increase Streaming Services to Cancel Melatonin Rival Monkeypox Renamed
Want CNET to notify you of price drops and the latest stories?
No, thank you

PurchasePro blows past estimates; shares climb

The company easily hurdles analyst estimates in its fourth quarter, raking in $7.6 million, or 11 cents a share, on sales of $33.6 million. easily hurdled analysts' estimates in its fourth quarter Monday, raking in $7.6 million, or 11 cents a share, on sales of $33.6 million. It also raised its estimates for first-quarter and fiscal 2001 sales and earnings.

First Call consensus expected it to lose a penny a share in the quarter on sales of $33.6 million. shares closed up $1.44 to $15.94 ahead of the earnings report before shooting up to $17.65 in after-hours trading. The company is an application service provider of e-commerce products for small- to medium-sized businesses.

The $33.6 million in sales marks a 1,160 percent surge from the year-ago quarter when it posted a loss of $6 million, or 11 cents a share, on sales of $2.7 million.

On a pro forma basis, it earned 10 cents a share.

PurchasePro shares lost more than 42 percent of their value last week after Barron's questioned the company's business model and valuation and Prudential Securities downgraded the stock from a "strong buy" rating to "accumulate."

Susan LaCerra, an analyst at Jefferies & Co., predicted the business-to-business services provider would earn a penny a share in the quarter on sales of $30 million.

"We're expecting a good quarter," she said ahead of the earnings report. "What's happened lately, to me, looks like a case of a lot of shorts running scared."

During a conference call with analysts, Chief Executive Officer Charles Johnson said he was "extremely proud of these results," noting the company managed to generate more than $10.3 million in positive cash flow in the quarter.

"We're just beginning to realize the potential of this business model," he said.

Johnson told analysts to expect sales of $42 million in its first quarter, more than 20 percent above most analysts' estimates. He said the company will post a profit of 9 cents a share in the first quarter, well above the 2 cents currently forecast by First Call.

Fiscal 2001 sales and earnings are expected to jump to $225 million and 59 cents a share, respectively, considerably higher than current estimates of $165 million and 37 cents a share.

"By all accounts, this was a great quarter for us," Chief Financial Officer James Clough said. "We continue to see strong demand for all of our marketplaces."

In the quarter, network access fees accounted for $10.2 million in sales, or roughly 30 percent of the company's total sales in the quarter. Licensing sales jumped 95 percent from the third quarter to more than $22 million, while advertising sales improved 72 percent sequentially to $1.1 million.

"We believe advertising sales will be an area of rapid growth as this market matures," Clough said.

In the fiscal year, PurchasePro posted a loss, excluding charges, of $12.6 million, or 20 cents a share, on sales of $65 million compared with a loss of $15.2 million, or 44 cents a share, on sales of $6 million in fiscal 1999.

Last quarter, it beat the Street when it posted a loss of $4.7 million, or 7 cents a share, on sales of $17.3 million.

The stock moved as high as $82 in March before collapsing to a low of $9.19 in May.

Eight of the 10 analysts tracking the stock rate it either a "buy" or "strong buy."