Tuesday September 28 11:06 AM ET
CMGI Shares Surge On Strong Earnings, Good
Outlook
BOSTON (Reuters) - Shares of CMGI Inc. (Nasdaq:CMGI - news) rose more than
5 percent Tuesday after the Internet venture firm posted better-than-expected
quarterly earnings.
CMGI was up by as much as $5 at one point, and at mid-morning was ahead $3.50 at $96.625 in furious
trading that appeared to be dominated by retail investors rather than big institutions. CMGI was the
fourth most active issue on the Nasdaq stock market.
In a conference call following the earnings release, which came after the market's close Monday, CMGI
Chairman and Chief Executive David Wetherell said the company expects vastly increased revenues
during the fiscal year that began Aug. 1 as its portfolio of Web firms begins to generate significant
revenues.
The Andover, Mass.-based company also said it plans to spin off its AltaVista Internet portal, which it
bought earlier this year from Compaq Computer Corp. (NYSE:CPQ - news), in an initial public offering
(IPO).
CMGI hopes to file documents for the IPO after the current quarter ends on Oct. 31, with a plan to go to
market in January, Wetherell said during the conference call.
CMGI's fiscal 1999 fourth-quarter earnings of $453 million, or $4.24 per diluted share, topped forecasts
compiled by First Call/Thomson Financial of $4.08 per share.
Wetherell said revenues in the current quarter would more than double from the $53.5 of the fiscal 1999
fourth quarter. He said fiscal 2000 revenues would top $750 million.
Analyst Ullas Naik of FAC Equities said in a research note that CMGI's fourth-quarter earnings and
revenues both topped his forecasts.
Naik said the revenue figures show many of CMGI's majority-owned firms, including Engage
Technologies, Adsmart, NaviNet, Planet Direct, and SalesLink, had graduated from being early-stage
companies dependent on CMGI funding to performing as full-fledged revenue-generators with IPO
potential.
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