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Lycos 4Q beats Street
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August 17, 1999: 6:31 p.m. ET
No. 3 Internet service posts net income of 1 cent a share while revenue doubles
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NEW YORK (CNNfn) - Internet service portal Lycos Inc. Tuesday reported fiscal fourth-quarter income of 1 cent a share, slightly above expectations, as stronger advertising revenues and higher traffic through its Web site boosted overall sales.
Lycos reported net income on a pro-forma basis of $600,000, or 1 cent a share during the quarter ended July 31. That compared to a net loss of $700,000, or 1 cent, in the same quarter a year earlier. Analysts polled by First Call Corp. had anticipated the company to break even during its latest quarter. Revenue climbed 137 percent to $45 million from $19 million.
Lycos penned several large advertising agreements during the quarter, including one with WingspanBank.com, which the company expects could generate as much as $135 million in additional revenues, according to Lycos president Robert Davis.
The company also set up a $70 million Internet venture capital fund under the name "Lycos Ventures" to invest in other business to push the Lycos brand name and completed three other acquisitions totaling over $265 million. It also acquired minority equity positions in seven other entities.
"We have been unwavering in our commitment to building value for our shareholders and this quarter is another important milestone," Lycos president Robert Davis said in a statement. "We have delivered on this promise and will aggressively continue to expand the business," he said.
As for services, Lycos introduced a number of new ones to its site during the quarter, including online auctions, which have gained popularity among users. It also announced the launch of the new Lycos MasterCard with Fleet Bank.
Average page views during the quarter rose 17 percent to more than 70 million per day, while registered users surpassed the 32-million mark, up 20 percent from the previous quarter, Lycos said.
Including merger-related expenses and other costs such as amortization of assets, Waltham, Mass.-based Lycos posted an operating loss of $21.4 million, or 24 cents a share for the quarter compared with an operating loss of $6.8 million, or 9 cents a share, in the year-earlier quarter.
For the fiscal year, Lycos recorded a pro-forma loss of $4.2 million, or 5 cents a share compared to $3.6 million, or 6 cents a year earlier. After one-time charges and other costs, Lycos posted a net loss of $52 million, or 60 cents a share compared to $28.4 million, or 46 cents in fiscal 1998.
Lycos shares ended the day Tuesday up 1-7/8 at 42-5/16. In after-hours trade, Lycos shares fared slightly better, rising to 42-3/4.
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