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July 20, 1999 22:35
INTERVIEW - NextCard says Q2 revenues to beat
estimates
By Michael Kahn
SAN FRANCISCO, July 20 (Reuters) - Internet-based credit card issuer
NextCard Inc. expects its revenues for the second quarter to significantly
exceed analyst expectations, although its per share loss should be in line with
forecasts, the company's chief executive said.
NextCard Chief Executive Officer Jeremy Lent told Reuters the San
Francisco-based company's revenues would be well above the $1.7 million
predicted by analysts for the second quarter and the $1.2 million in revenues it
posted for all of 1998.
"The revenue number will be significantly above what analysts had expected,"
Lent said in telephone interview.
Earnings, however, would be more in line with analyst predictions of a loss of
46 cents a share, due to investment needed to build the business quickly, Lent
said.
NextCard, which went public in May with an offering that raised more than
$130 million, is set to announce its second quarter earnings Aug. 5. It will be
the first time the company has reported earnings publicly.
Lent said the company has about a 25 percent share of the online credit card
market. NextCard offers online credit card approval for Visa cards and markets
its product primarily on the Internet.
NextCard targets people with good credit who do a lot of business on the
Internet, Lent said. At the close of the first quarter, the company had more
than 66,000 customers.
Lent attributed the better-than-expected revenues in part to a sophisticated
database system that has allowed NextCard to identify sites on the Internet
where the company gets more profitable customers.
In doing this, NextCard has attracted greater balances and found cardholders
who are willing to remain with the company after moving over a lot of debt
because of features like a rewards program offering travel and retail perks, he
added.
"Our system identified a greater-than-expected number of sites that gave us
highly profitable customers," Lent said. "This allowed us to grow the business
at a more rapid rate than analysts had expected."
NextCard stock was off 88 cents to close at $38.88 on Nasdaq.
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