STOCKS TO WATCH: Engage, ICG and 24/7 Media

Engage shares are going to take a pounding Thursday after it warned that it will post a wider-than-expected loss in its first quarter and announced that its CEO was jumping ship.

Company officials said that it now expects to lose around 25 cents a share in the quarter on sales of between $40 million to $42 million.

First Call Corp. consensus expected it to lose 20 cents a share in the quarter.

The revised sales figures will result in a dramatic sequential decline from the fourth quarter when it posted a loss of $23.9 million, or 14 cents a share, on sales of $66.7 million.

Company officials said weak demand from Internet advertisers, an oversupply in the media market and a longer-than-expected sales cycle for its software business contributed to the sales shortfall.

More disturbing, company officials said it expects the slowdown to continue for the next few quarters.

"We believe many of these conditions could persist into the next three quarters," said CFO Bob Bartlett in a prepared release. "We believe we can achieve modest quarter over quarter growth throughout fiscal 2001, with total revenues anticipated to be in excess of $200 million."

Separately, Engage said that Anthony Nuzzo will take over the chief executive post from Paul Schaut, who will resign effective Nov. 20.

The Internet incubator will likely be in as much trouble as Engage after it posted a third-quarter loss of $263.9 million, or 94 cents a share, on sales of $16.4 million.

It also said it will lay off 35 percent of its workforce and take at fourth-quarter charge of between $25 million to $30 million.

There was no First Call Corp. consensus estimate for the Internet incubator in the quarter.

Ahead of the earnings report, its shares finished off $2.06 to $16.25.

Company officials said it invested $1.7 billion into a narrow field of 15 privately held companies that met "stringent" investment criteria.

Last quarter, ICG posted a loss of $186.9 million, or 70 cents a share.

Here's another train wreck waiting to happen.

24/7 Media missed analysts' estimates in its third quarter, announced it would lay off 200 employees and said it only has $23.1 million in cash left in its coffers.

The online advertising and marketing firm posted a loss of $22.5 million, or 59 cents a share, on sales of $48.1 million.

First Call Corp. consensus expected it to lose 47 cents a share in the quarter.

Its shares closed off 98 cents to $4.64 ahead of the earnings report.

The $48.1 million in sales represents a 98 percent improvement from the year-ago quarter when it lost $7.4 million, or 35 cents a share, on sales of $24.3 million.

However, those sales marked a slight sequential decline from the second quarter when it lost $13.3 million, or 49 cents a share, on sales of $52.2 million.

It exited the quarter with cash and cash equivalents on the balance sheet of $23.1 million.

Looking ahead, company officials expect fourth-quarter sales of between $48 million to $56 million, roughly flat to as much as a 15 percent improvement from the third quarter.

It expects to post a loss of between 39 cents to 44 cents a share in the quarter.

Analysts were expecting a loss of 39 cents a share in the fourth quarter.