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CompuServe loss widens
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June 18, 1997: 10:31 a.m. ET
Company's $18 million loss due to special charges, falling subscriber base
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NEW YORK (CNNfn) - CompuServe Corp. Wednesday reported a fourth-quarter loss of $18 million, or 19 cents a share, due to a special charge of $9.2 million and continued declines in its subscriber base.
Those results compare with a third-quarter loss of 15 cents a share and a loss of 2 cents a share in the same period a year ago.
The one-time charge was taken to consolidate the company's Columbus, Ohio, offices and for the sale or write-down of certain equity investments in content providers and miscellaneous technology.
The results were announced before the close of trading Wednesday. CompuServe shares ended the day unchanged at 10-1/8.
"Our fourth-quarter results were encouraging in some respects and disappointing in others," said Frank L. Salizzoni, CompuServe president and acting chief executive officer.
"Overall, we made progress toward our goal of stabilizing earnings and returning CompuServe to profitability. We expect further improvement in earnings and cash flow, our goal being to reach or exceed the breakeven point in earnings sometime in the second half of the 1998 fiscal year," he said.
Salizzoni attributed the decline in U.S. subscribers in part to a reduction in direct marketing during the quarter. Marketing was increased in May after the company decided to focus on business, professional, technical and other "sophisticated" consumers.
At the end of the quarter, CompuServe reported 5.37 million subscribers, including subscribers to NiftyServe, a Japanese licensee.
--Cyrus Afzali
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CompuServe
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