Infoseek Earnings Fall Short
Infoseek, one of the slowest-growing Internet portal sites, reported a wider-than-expected third-quarter loss of 8 cents, pinning its future on a huge deal with Disney that will likely soon be approved.
According to the analyst consensus estimates compiled by First Call and Zacks Investment Research, Wall Street was looking for the Sunnyvale, Calif.-based company (SEEK) to lose 6 cents a share in the quarter.
Sales for Infoseek rose to $19.2 million in the quarter, which ended in September, compared with $8.4 million in the year-ago period.Traffic growth for the entire Infoseek site rose just 5.4 percent in September, compared with June. Excluding chat pages, however, page views were up 17 percent. Plus, traffic at Starwave's joint ventures with ESPN and ABCnews.com increased to 17 million page views per day from 12 million in June.
Starwave will become part of Infoseek if an alliance the company signed with Disney (DIS) in June is approved by shareholders at a meeting Nov. 18.
Disney, which is to take a 43 percent stake of Infoseek when the deal is approved, is working with Infoseek to create a new Go.com portal site featuring all of Disney's online properties.
The quarterly loss had been expected by BT Alex. Brown analyst Shaun Andrikopoulos, who wrote in a September research report that the company planned to increase expenses by $1 million in the quarter as it "accelerated the Starwave integration process" ahead of the Go Network launch.
"During the quarter we experienced solid revenue growth which was driven primarily by the growth in the ad-revenue-supported Infoseek service," Harry Motro, president and chief executive of Infoseek, said in a statement. "We also signed several significant agreements that will position Infoseek to better leverage our pending relationships with Starwave and The Walt Disney Company."
Ahead of the report, shares of Infoseek rose 1 9/16 to 33 3/16. The stock's 52-week high is 45, and the 52-week low is 7 1/8.
Written By Darren Chervitz