8/11...SFE..profits fall
(UPDATE: adds details, stock price)
WAYNE, Pa., Aug 11 (Reuters) - Safeguard Scientifics Inc. (NYSE:SFE - news), an Internet holding company, on Friday said its second-quarter profits fell 81 percent, but revenues at its partner companies rose 30 percent.
For the quarter, the company earned $2.2 million, or 2 cents per share, down from $11.5 million, or 11 cents a share, in the same quarter a year earlier. The company had nearly 12 percent more shares outstanding in the quarter compared to a year ago, and made several acquisitions of young companies that have not yet generated revenues.
As a holding company, it makes money by bringing start-ups to the public market and by buying and selling stakes in other companies. For the most part, analysts disregard earnings and revenues figures when judging the performance of such a company.
Safeguard, which focuses on communications and electronic services companies, said its partners had aggregate revenues of $1.2 billion in the second quarter, up 30 percent from a year earlier.
Safeguard shares were down 1-7/8 to 23 in morning trade on the New York Stock Exchange. The stock's 52-week range is 15-7/8 to 98-15/16.
At the end of the quarter, Safeguard had direct ownership interests in 49 partner companies, and indirect investments through a web of about 300 partner companies. It has about a 14 percent stake in Internet Capital Group Inc. (NasdaqNM:ICGE - news), another Internet holding company, which has interests in 77 companies.
During the second quarter, Safeguard acquired stakes in 14 companies, including a 30 percent interest in Atlas Commerce, which provides software for Internet marketplaces. It also acquired a 34 percent stake in ThinAirApps Inc., whose software allows real-time wireless access to any kind of data from any device.
Also in the second quarter, Safeguard and its strategic partner Textron Inc. (NYSE:TXT - news) invested in the second round of funding for EqualFooting.com, an online marketplace that provides purchasing, financing and shipping services to small businesses in the manufacturing and construction industries.
During the quarter, Safeguard sold its interest in Arista Knowledge Systems, which provides Internet-based learning. Arista was acquired by DigitalThink Inc. (NasdaqNM:DTHK - news).
Another of Safeguard's holdings, Extant Inc., was acquired by Dynegy Inc. (NYSE:DYN - news).
On Friday, Safeguard and one of its equity fund partners, PA Early Stage Partners, agreed to a $4 million deal to acquire an interest in aeonDigital Inc., an electronic commerce network for the publishing industry. It also said its wholly owned management consulting firm, aligne Inc., had acquired K Consulting, which specialises in electronic business infrastructure consulting services, for $7.5 million.
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