Xpedior Drops on Revenue Warning
By Jamie Paton
TheStreet.com/NYTimes.com Staff reporter
9/5/00 4:43 PM ET
Echoing what has become a familiar refrain in the Web
consulting industry, Xpedior (XPDR:Nasdaq - news)
warned Tuesday that it expects lackluster revenue in the
third quarter, largely because of diminished demand from
dot-com clients.
Wall Street, in turn, reacted as it did when it first heard
that concern last week from two other companies;
Xpedior's stock plunged $2.56, or 23.7%, to close at
$8.25 Tuesday, well off its 52-week high of $34.75.
Xpedior, based in Chicago, said it
feared that revenue in the quarter
would drop about 10% from the
$62.9 million in the second
quarter of this year. Still, revenue
is expected to climb 65% from the $34.5 million posted
in the comparable quarter of 1999, the company
estimated.
"Customers are committed to using the Internet for
business," David Campbell, president and chief
executive of Xpedior, said in a statement. Yet a weaker
appetite among dot-com businesses has prompted
corporations well beyond the more volatile Internet sector
to hold back on their online projects, Campbell added.
At the same time, though, Xpedior said it hoped to
deliver expected revenue growth in the fourth quarter of
this year. "We remain excited about the demand for
e-business solutions providers," Campbell said, "and
Xpedior's prospects for continued strong growth."
Xpedior's disappointing news comes as no surprise. Last
week, Viant (VIAN:Nasdaq - news) and iXL Enterprises
(IIXL:Nasdaq - news), two other Internet consulting
businesses, cautioned that they would report a
third-quarter loss, instead of a predicted profit, as
cash-strapped dot-com companies scale back their
efforts. That, in turn, has taken some pressure off bigger
corporations to expand their e-business plans, the
companies complained.
Viant's stock, which plunged more than 40% Friday,
dropped another 19 cents, or 2.3%, to close at $8
Tuesday. IXL's shares fell $1.63, or 16.4%, to close at
$7. Analysts, pointing out that many of the Web
consultants offer similar services, say the companies are
poised for consolidation. |
