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Loudcloud misses, warns
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June 12, 2001: 4:50 p.m. ET
Internet services provider falls short, sees more trouble ahead
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NEW YORK (CNNfn) - Internet services provider Loudcloud Inc. on Tuesday logged a fiscal first-quarter loss that was wider than expected as the newly listed company's business was hit by the slowdown in information technology spending.
And executives lowered their financial targets for the balance of the fiscal year, blaming continued weakness in the economy.
After the close of trading, the company, said its loss for the quarter ended April 30 was $60.3 million, or $1.25 per share. That compares with a loss of 19 cents per share during the same quarter a year earlier and is 4 cents more than the $1.21 per share analysts polled by earnings tracker First Call generally had expected Loudcloud to lose during the quarter.
At $11.7 million, the company's fiscal first-quarter revenue was up 31 percent over revenue of $8.9 million in the fiscal fourth-quarter.
The Sunnyvale, Calif.-based company, which manages Internet infrastructures for online-intensive businesses, made its debut on Nasdaq in March, selling 25 million shares at $6 each.
Loudcloud (LDCL: down $0.46 to $3.38, Research, Estimates) shares fell 46 cents to $3.38 ahead of the earnings news Tuesday. They slid another 33 cents to $3.05 in extended-hours trade.
Loudcloud offers a range of Internet management services which include the software and hardware needed to build and maintain a site, application deployment, content distribution, e-mail and site testing. Its clients, which pay monthly fees based on capacity, include companies such as Mercury Interactive, Britannica.com and Juniper Financial.
Like most information-technology (IT) related companies, Loudcloud's financial results have been hurt by the slowing and uncertain U.S. economy, which has prompted corporate IT managers to either defer of cancel their spending plans.
Last month, the company announced plans to cut 122 jobs, 19 percent of its workforce, in an effort to reach the cash flow breakeven point.
"While I am pleased by the strength of our first quarter results and the quality of our bookings, the balance of the year is being impacted by the difficult macroeconomic environment," Ben Horowitz, Loudcloud's president and chief executive, said in a statement Tuesday.
Looking ahead, Loudcloud said its expects revenue in the fiscal second-quarter ending in July to be roughly $14 million. Recent expectations on Wall Street had been for sales in excess of $15.5 million. The company also said it expects its loss before interest, taxes, depreciation and amortization (EBITDA) to range between $33.5-$34.5 million, which is wider than it previously had anticipated.
The company also said it expects to record a one-time restructuring charge of as much as $28 million related to the layoffs.
For all of fiscal 2002, Loudcloud said it expects revenue ranging between $53 million and $57 million, and an EBITDA loss of between $129 million and $132 million.
The company did not provide its estimated losses for the remainder of the fiscal second-quarter or the remainder of the year on a per-share basis. 
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