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Zapata income jumps

The company reports that net income rose 14-fold in the third quarter.

Zapata, which, until a few months ago, when it branched into Internet ventures, was a food-packaging company, reported today that its net income rose 14-fold during the third quarter.

In addition, the company said that it expects to make a major announcement early next week regarding the buyout of an Internet company to help build its "portal," to be launched this fall, according to an analyst who joined a conference call today.

Zapata said it wants to be the "roach motel" of the Internet, i.e., eyeballs check in but they don't check out, executives said during the call.

The company also said that it may consider an initial public offering for its Internet business, according to a statement by Louis Riley of Riley Capital Research, which reiterated its "strong buy" rating on the company's stock following its earnings report. A Zapata spokesman confirmed that these remarks were made during the call.

Zapata's net income for the quarter that ended June 30 grew to $58.1 million, up sharply from $4.8 million reported for the year-ago quarter. Net income included a $86.7 million gain from the spin-off of Omega Protein Corporation, of which Zapata retains 60 percent.

"We believe this is the best quarter in the 45-year history of the company," said Zapata president and chief executive Avram Glazer. "Zapata recently began diversifying its assets into the Internet business with a goal of achieving similarly favorable results in the future."

Zapata closed yesterday at 21.75, and has traded as high as 24.94 and as low as 5.34 during the past 52 weeks.

The company recently announced plans for a major strategic shift toward Internet and e-commerce ventures. During the past few months, Zapata announced letters of intent to acquire 25 Internet site and e-commerce businesses, including Web communities CoolChat and Bianca Troll Productions.

In early July, Zapata announced that it was splitting itself into two companies, with the newly formed Zap concentrating on Internet ventures. Zapata was to remain a marine protein and food packaging company.

In May, Excite, an online search engine, rejected a $72-per-share unsolicited bid from Zapata.

Operating income for the third quarter rose to $9.2 million from $4.9 million a year earlier. The company attributed the strong performance to higher income generated by Omega Protein, which was a wholly owned subsidiary of Zapata through April 8, 1998 when Omega Protein completed its initial public offering.

Jeff Pelline contributed to this report.