With earnings season nearly over, bad news continues to outweigh the good for many tech stocks.
With earnings season nearly over, bad news continues to outweigh the good for many tech stocks. Our index fell a moderate 4.7 percent last weekits second consecutive decline.
MarchFirst was last weeks worst offender. The company posted a whopping $6.8 billion loss for the fourth quarter, or $37.09 per diluted share, compared with a net income of $8.4 million, or 12 cents a share, a year ago. The latest numbers included a $6.5 billion charge to write off goodwill from the merger of Whittman-Hart and USWeb/CKS as well as charges for asset sale losses and staff cuts.
The current quarter also looks bad. Chairman and CEO Robert Bernard says MarchFirst expects revenues of $190 million to $215 million for Q1, compared with $213.5 million in Q4 00.
"Rollups never work," laments Brian Maimone, an analyst at ING Barings, referring to the design of MarchFirst, which is the result of multiple acquisitions.
Two other Web consulting firmsRazorfish and Scientalso took a dive last week. Razorfish reported a net loss of $158 million, compared with a year-earlier loss of $23 million.
Scient, which released a disappointing earnings report weeks earlier, continued to spiral lower. "Its not likely that Scient will be able to pull out of its tailspin anytime soon," says Maimone.
Predictive Systems, a network-infrastructure specialist, was another casualty of weak earnings. The company reported a net loss of $8.5 million, compared with a loss of $146,000 a year earlier. Revenue was $21.2 million for the fourth quarter, below the companys estimate of $23.5 million, issued less than a month ago.
Despite the spate of negative earnings reports, there were some bright spots.
Answerthink, an Internet systems integrator, posted a net profit of $7.9 million for the year, up from $1.1 million in 1999. Revenues for the fourth quarter were $69.1 million, at the upper end of analysts forecast.
IMRglobal Corp. benefited from takeover rumors. The rumors, which had been circulating for some time, took on even more currency last week, when the company suddenly canceled its earnings release and subsequent conference call.
The company did not return our calls seeking comment but has told analysts previously that it was exploring ways to raise shareholder value, according to Maimone at ING.