If anybody didn't see to-day's little bombshell, I'll try to post it here........
Breakaway sees weak Q4, will cut more jobs
Dec 29, 2000 10:16 AM ET
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By Lori Valigra, LocalBusiness.com
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BOSTON, Dec. 29 (LocalBusiness.com) -- Breakaway Solutions Inc., which saw its share price triple during its initial public offering in October 1999, opened this morning at an annual low of 75 cents, down 25 percent from yesterday's close, after the company said its fourth-quarter loss would be much greater than expected and it would have to cut another 20 percent of its workers, or about 200 jobs.
Stock Quote
BREAKAWAY SOLU
BWAY 0.88 0.13 -12.5%
Results delayed 20+ minutes.
After the closing bell on Thursday, the Boston-based company said it expects to lose 26 cents to 28 cents per share in the quarter, much steeper than the 5-cent loss expected by analysts polled by First Call/Thomson Financial.
Breakaway Solution's (Nasdaq: BWAY) 52-week high was $88.50 per share. It closed Thursday at $1 after hitting a new low that day of 84 cents per share.
Breakaway Solutions also said it will trim more workers on top of the 10 percent already in the works in an effort to cut about $10 million in expenses per quarter.
Slammed by start-ups, dot-coms
Company CEO Gordon Brooks said the company was particularly hard hit by a sharp decline in business from business-to-business incubator Internet Capital Group (Nasdaq: ICGE).
The company also said revenue from venture-backed dot-com companies are expected to be about $3.4 million during the fourth quarter, about 48 percent less than in the third quarter of 2000.
As the dot-com crisis escalated in December, Breakaway Solutions saw its support from Wall Street diminish as well. In early December, as its stock fell to the $2 range, Morgan Stanley Dean Witter downgraded the stock to "Neutral" from "Outperform." And Janney Montgomery Scott downgraded it to "Hold" from "Accumulate."
Despite the bad news, the company still said fourth-quarter revenue is expected to be $22.5 million to $24 million, up about 65 percent from last year's quarter.
'This quarter particularly challenging'
"Like many in our sector, Breakaway Solutions has felt the impact of a changing marketplace, particularly a shift away from a reliance on dot-com revenues," Brooks said. "Unfortunately, these market changes have combined with Internet Capital Group's reduction of its investments in its affiliate companies to make this quarter particularly challenging."
He said revenue from Internet Capital Group and venture-backed dot-coms are expected to decrease substantially as a portion of the company's total revenue in the first quarter of 2001.
"We are seeing an increase in demand for our services from established companies such as Fuji and Motorola, and our backlog stands at more than $17 million for the first quarter of 2001," he said.
Correspondent Lori Valigra covers Boston biotech, health and medical issues for LocalBusiness.com. E-mail her with story ideas and comments. |
