Someone needs to view these two stories in the same context..
Q: How do you lose $1.3Bn in a single quarter? A: Private Jet.
Tuesday September 25, 6:03 pm Eastern Time
CMGI Q4 loss doubles, sees 2002 revenue off (UPDATE: Adds details about 2002 outlook in paragraph 2, byline)
By Tim McLaughlin
BOSTON, Sept 25 (Reuters) – CMGI Inc., the beleaguered owner of search engine AltaVista, on Tuesday reported that its fourth-quarter net loss doubled to nearly $1.3 billion as it struggles to keep its stable of Internet companies afloat. ADVERTISEMENT
Andover, Massachusetts-based CMGI also warned that its revenue for the current 2002 fiscal year would fall about 10 percent below fiscal 2001 levels as it reduces its portfolio of Internet properties. Once the darling of Internet investors, CMGI has lost the interest of Wall Street as its stock has declined steadily since March 2000.
After the market closed, CMGI said it posted a net loss of $1.27 billion in the fourth quarter, or $3.70 per share. That compared with a net loss of $633.7 million, or $2.17 a share, in the year-ago quarter.
The wider loss comes as CMGI marked down the value of Internet investments such as Pacific Century CyberWorks Ltd., which was written down by $187.5 million.
CMGI said it expects to break even on a recurring operating basis during the fourth quarter of fiscal 2002, which ends July 31. But the firm is taking a series of drastic measures to conserve its dwindling supply of cash.
CMGI has ceased funding the operations of Internet access provider NaviPath and agreed to sell its Webcasting firm Activate.com to Loudeye Technologies Inc. (NasdaqNM:LOUD – news). In addition, CMGI’s majority-owned Web hosting firm, NaviSite Inc. (NasdaqNM:NAVI – news), on Tuesday said it could run out of money in the current quarter and could receive a “going concern” opinionfrom its auditors.
With Internet ad spending in a protracted decline, CMGI’s fourth-quarter revenue fell 32 percent to $255.5 million, compared with $377.2million in the year-ago quarter.
CMGI also has been losing executives, such as its long-time chief financial officer and the chief executive of Engage Inc.(NasdaqNM:ENGA – news), its majority-owned online marketing company.
Meanwhile, CMGI ended the fiscal year on July 31 with cash and cash equivalents of $710.7 million, and now stands at $677.7 million, said George McMillan, CMGI’s new CFO. The firm said it expects to exit fiscal year 2002 with more than $325 million.
CMGI’s stock closed up 1 cent at $1.19 on Tuesday, far below its year high of $37.38. The stock is off about 83 percent this year, underperforming the 39 percent decline on Nasdaq.
CMGI’s CEO sues over airplane troubles By Globe Staff and Wires, 9/11/2001 Â Â
CMGI Inc. chief executive David Wetherell has sued General Electric Co. and Bombardier Inc., saying an airplane and engines made by the companies were defective.
Wetherell bought a $23 million Challenger 604 plane in February 2001; it later suffered two separate engine failures while in flight, according to the July complaint.
Wetherell is seeking a refund for the plane and for expenses such as alternative transportation and attorney’s fees, according to a letter Wetherell’s attorney sent to Bombardier, which made the plane.
GE made the engines.