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Spyglass stock mirrors woes

New pessimism for first-quarter earnings means a ten percent drop on Wall Street for Browser software supplier Spyglass.

Shares of Spyglass (SPYG) fell ten percent today, following the company's announcement its first-quarter loss will be greater than Wall Street's estimates.

Spyglass shares closed at 11-1/4 per share, down 1-1/4 of a point from Tuesday. The company said it expects to report a first-quarter loss of 10 to 13 cents a share, far greater than analysts' estimates.

Wall Street had expected the browser software maker, which licenses its products to other companies, to post a loss of 1 cent a share for the quarter, according to First Call.

Company officials had previously said Spyglass may post a loss in the first half of the year because of increased spending in research and development.

On another front, Spyglass's revenue is expected to reach about $4 million for the first quarter ended December 31.

Spyglass said it does not expect to realize any revenue in the quarter from Microsoft above the minimum quarterly payment due under a licensing agreement with the software giant. The agreement covers use of Spyglass software in Microsoft's Internet Explorer.

Spyglass said it is "not able to determine the amount of royalties due from Microsoft in excess of the minimum payment because [it] has not received a royalty report with respect to the number of copies of Internet Explorer distributed by Microsoft."

Spyglass said that under the agreement, Microsoft agreed to pay royalties to Spyglass based on distribution of Internet Explorer. Spyglass said it intends to exercise its contractual right "to audit Microsoft's records to determine whether, and to what extent, additional royalties are owed to Spyglass."

Reuters contributed to this report