USWeb beats estimates
USWeb shares move a bit higher after the Internet services provider announces it has surpassed Wall Street estimates for the third quarter.
USWeb shares were up $2.93 up from $9.37 this morning to $11.68 this afternoon and traded as high as $12.37 during the day.
The company announced today that its revenues for the quarter, ending September 30, were $34 million, or a 34 percent increase over revenues of $25.4 million reported for the previous quarter. Excluding noncash charges, the company reported a profit of $835,000, or 2 cents per share, compared with a net loss of $1.2 million, or 3 cents per share, the previous quarter, and beating analyst estimates of a loss of 2 cents for the quarter, according to First Call.
Including noncash charges, the company posted a net loss for the quarter of $38.5 million, or 95 cents per share, compared with a net loss of $60.9 million, or $1.81 per share, in the previous quarter ending June 30.
"This was another milestone quarter for USWeb," Tobey Corey, president and COO of the company, said in a statement. "We attribute our early attainment of profitability, after noncash charges, to a number of key factors: the benefits of a well integrated organization, very strong demand, larger client engagements, streamlined business processes, and shared knowledge across the firm."
In the third quarter, USWeb merged with CKS Group to form a new company called Reinvent Communications. As reported earlier , the deal is valued at about $350 million as of yesterday, executives said. CKS's stock rose nearly 8 percent on the news, while USWeb's stock fell nearly 15 percent.
Today the company announced the launch of USWeb Electronics Services, a set of externally managed packaged Internet applications for corporations to be hosted by USWeb. The new offering will include services packaged with third party applications in the areas of financial services, distribution, manufacturing and supply chain management, collaboration, resources, and payroll as well as sales force automation, the company said.
The merger with CKS, which is expected to close by the end of 1998, is a move to meet what the company sees as customer demand for integrated consulting services with Internet systems and new media communications.
In total, USWeb has acquired 33 companies in the last 21 months. Assuming each acquisition had occurred by the start of 1998, the consolidated revenues of USWeb for the third quarter would have been $34.5 million, the company said.
Operating expenses excluding noncash charges were $13.0 million or 38 percent of revenues in the third quarter, compared to $11.7 million or 46 percent in the previous quarter.