Wall Street Tug-of-War

Mixed earnings reports pulled e-commerce integrator stocks in opposite directions last week, leaving our index with a mere boost of 0.6 percent. For the year, however, the index has gained a whopping 38 percent, mimicking the strong climb in small-cap stocks overall.

C-bridge Internet Solutions, a business services and software provider that reported its earnings a week earlier, was the biggest winner. The company assigned Richard Putz, its chief strategy officer, the additional title of chief financial officer. Putz replaces Richard Wester, who will resign effective March 30. C-bridge also kicked off its 2001 seminar season for corporate executives. For its Q4, C-bridge reported revenue of $26.2 million and a pro forma net loss of $727,000, or 3 cents per share—in line with expectations.

Other winners last week included eLoyalty, which announced stronger than expected Q4 earnings; Complete Business Solutions, which put in place a restructuring plan to achieve profitability; and Covad Communications, the DSL provider that was the subject of takeover rumors. Covad did not return phone calls for comment.

ELoyalty reported revenues of $57.6 million and zero earnings per share on a diluted basis. It forecast stronger numbers for the current Q1—$62 million for revenues and 4 cents per share for earnings. It is the only small-cap systems integrator to beat expectations and forecast stronger performance, says Mark Wolfenberger, analyst at Credit Suisse First Boston.

Meanwhile, IT services provider CBSI announced it will take a $40 million pretax charge in the fourth quarter to write down certain assets and restructure operations. Without those charges, the company expects to break even for the fourth quarter, with little change in revenues from the previous quarter. Its earnings results will be released Feb. 15. As part of its reorganization, CBSI will centralize and expand its sales force and launch a branding campaign that introduces a new corporate name.

Other companies didnt fare nearly as well. Inforte plunged after disclosing a weaker than expected Q1 outlook.

DiamondCluster International revised downward its current quarter forecast, after reporting fiscal third-quarter earnings that were in line with the market consensus.