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Safeguard Scientifics reports fat 4Q profit

    The continuing success of Safeguard Scientifics' (NYSE: SFE) spin-offs and investor subscription programs led the company to profit $2.09 a share in its fourth quarter, the company said Thursday.

    Shares in the incubator of software, communications and e-services companies closed at 156 1/4 Wednesday, down slightly from their 52-week high of 191.

    The company, which is similar to CMGI (Nasdaq: CMGI), reported results way out of whack with First Call's estimated profit of 11 cents a share. Investors may not pay much attention to income or revenue results, since the company is continually cashing in on its stable of Internet holdings.

    Net income for the fourth quarter of 1999 was $78.5 million, or $2.09 a share, on a diluted basis, compared with $39.8 million, or $1.18 a share in the same period last year.

    Net income for the year ended December 31, 1999, was $123.5 million, or $3.47 a share, compared with $110.1 million, or $3.22 a share in 1998.

    The 1999 net income included a gain of $112.4 million, net of tax, related to the issuance of common stock by Internet Capital Group (Nasdaq: ICGE), a spin-off of Safeguard Scientifics that went public in August.

    Revenue for the fourth quarter of 1999 was $737.1 million compared with $625.0 million for the same period in 1998. Revenue for the year ended December 31, 1999, was $3.0 billion, compared with $2.3 billion in 1998. The increased revenue reflects higher sales at CompuCom, resulting from its acquisition of ENTEX's Technology Acquisition Services Division (TASD), which closed on May 11, 1999.

    The company said a continued high level of shareholder participation in the Safeguard subscription programs has created about $1 billion in shareholder value through its past four IPOs.

    Some highlights for the quarter include the IPO of eMerge Interactive (Nasdaq: EMRG), which raised $92.4 million in its debut. Textron Inc. also agreed to purchase $1 billion of Safeguard common stock, expected to close in the first quarter, and is working together with Safeguard to implement an e-commerce strategy for its network of over 200 Internet-related holdings, the company said.