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Excite 1Q falls short
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April 15, 1999: 4:26 p.m. ET
Web portal misses estimates by a penny amid higher marketing expenses
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NEW YORK (CNNfn) - Excite Inc. reported first-quarter earnings slightly below Wall Street estimates despite a 123-percent jump in revenue.
For the quarter ended March 31, the Redwood City, Calif.-based company posted a profit of $2.5 million, or 4 cents a share, on $54.1 million in revenue. Analysts polled by First Call forecast a profit of 5 cents a share for Excite (XCIT).
The company's earnings far outstripped its year-ago results, when it posted a loss of $5.9 million, or 16 cents a share, on $24.3 million in revenue.
Higher spending in sales and marketing efforts cut into Excite's profits. The company spent $20.4 million in sales and marketing efforts, nearly double the $10.8 million it spent in the year-ago period.
"We were committed to continuing a high level of investment in marketing this quarter to the extent that we could maintain earnings per share and generate positive cash flow, and that is precisely what we did," said George Bell, Excite chief executive officer.
"The surge in traffic and registrations is evidence of strong organic growth and increasing user awareness and loyalty to the service."
This will likely be the last time Excite reports quarterly earnings. In January, cable-based Internet access provider @Home Corp. (ATHM) agreed to acquire Excite for a stock deal then worth $6.7 billion.
The deal should, however, give Excite the financial clout to compete with leading portals Yahoo! Inc. (YHOO) and America Online Inc. (AOL) and boost its presence as high-speed Internet access reaches a broader audience.
Excite said traffic rose to 77 million page views per day during the quarter, a 33-percent increase over the previous-quarter's figures. Also, registered users (those who sign up for services such as free e-mail) climbed 40 percent to 28 million.
Excite shares fell 3-3/4 to close at 146-7/8 on the Nasdaq stock market. 
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Excite
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