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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF -- Ignore unavailable to you. Want to Upgrade?

To: Moonray who wrote (11283)	1/5/1998 12:31:00 PM
From: Scrapps	Respond to of 22053

Netscape has growing pains Internet software firm to report first quarterly loss since initial public offer January 5, 1998: 11:26 a.m. ET NEW YORK (CNNfn) - Netscape Communications Corp., the leading provider of Internet browser software, on Monday projected its first quarterly loss since going public in 1995. The loss underscores Netscape's problems stemming from its year-long transition from a software product company into an Internet solution services provider -- a problem that many growth-oriented technology companies have experienced. In a statement, the Mountain View, Calif.-based company said it will report a net loss for the fourth quarter of 1997 in the range of $85 million to $89 million, or 88 to 92 cents a share. Since its initial public offer, Netscape has never missed Wall Street's profit estimates, which were 14 cents a share for the latest quarter. "Over the last nine to 12 months, they've been growing into an enterprise software company. Today, we're seeing some growing pains," said Jamie Kiggen, analyst at Cowen & Co. Revenue from the enterprise business (which includes servicing revenue such as subscription, support and consulting) has dropped in part because of competitive pricing pressure but also because it now takes longer for its sales force to book a sale, said Peter Currie, chief financial officer. As opposed to individuals, Netscape's client-base now principally consists of small- to mid-sized corporations. "Longer sales cycles were what caused the shortfall," Currie told analysts on a conference call. Solutions services revenue fell to $91 million in the latest quarter from $95 million in the third quarter. Revenue totaled $54 million in the 1996 fourth quarter. "They are going to grow their top line but there is low visibility as to how rapidly they are going to grow it," Cowen's Kiggen said. In addition, sales from software packages such as Navigator and Communicator (known collectively as "standalone client" revenue) fell drastically amid its heated battle with Microsoft Corp. Although Netscape retains over 60 percent of the browser market, revenue plunged to $17 million in the 1997 fourth quarter from $52 million a year earlier. "This is a material shortfall. It's a sign of some structural problems at Netscape," said David Readerman, analyst at NationsBank Montgomery Securities. Netscape said it plans to take steps to immediately address the issues including closing certain facilities, outsourcing and eliminating some administrative costs. The company will take a restructuring charge of $35 million and approximately $52 million in merger-related charges to absorb its the purchases of Actra Corp. and Kiva Software. Excluding the charges, the net loss for the period is expected to be in the range of $14 million to $18 million, or 15 to 19 cents a share, based on a preliminary analysis of its operating results. Revenue is expected to range from $125 million to $130 million, representing growth of about 9 percent to 13 percent. The company reported revenue of $115 million in the fourth quarter of 1996. For the year, Netscape expects to report a net loss in the range of $113 million to $117 million, or $1.20 to $1.24 per share, including approximately $105 million of merger-related charges and $35 million of restructuring costs. The company also estimated revenue will grow 54 percent to 56 percent to $534 million to $539 million, from $346 million in 1996. Excluding the non-recurring charges, 1997 net income is expected to be in the range of $7 million to $10 million, or 8 to 11 cents a share. The company expects to report its actual results Jan. 27. -- from staff writer Robert Liu cnnfn.com