Earnings Reports for Nov. 2
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Priceline Reports Loss, Cuts Jobs
Priceline.com, the Internet-based,name-your-own-price system for travel and other services, today reported a third-quarter loss of a penny per share andannounced it was cutting 87 positions from its 535-member workforce.
The company also announced that its chief financial officer,former Citigroup CFO Heidi G. Miller, was leaving the company afterjust over eight months on the job.
Priceline reported a net loss of $2 million, compared with a proforma loss of $12 million, or 8 cents per share, in the samequarter last year.
Revenues for the quarter were $341 million, up from $152 millionin the year-ago quarter.
Priceline warned last month that it expected to report the loss,contrary to analyst expectations for a break-even quarter.
In the warning, company President Daniel H. Schulman pointed toincreased fuel charges by airlines, problems with canceled flightsand special sale fares offered by airlines themselves.
At the same time, a Priceline promotion drove down averageticket offers but failed to generate the anticipated increase involume.
“While we are disappointed in our airline ticket sales revenuefor the 3rd quarter, we believe that the business made solidprogress on several fronts,” said Priceline President DanielSchulman. “Our total customer base grew to 8 million. Repeat usagealso grew, with slightly more than half of all purchase offerscoming from repeat customers.”
Schulman said the company was beginning several initiatives toimprove customer satisfaction including changes to its Web site and“educational initiatives” to demonstrate the value of theservice.
Priceline said the layoffs and other changes would result in afourth-quarter charge of about $9 million. It said it was revampingits compensation program for remaining employees, mostly throughstock options, which would also result in an unspecifiedfourth-quarter charge.
Priceline said Miller was leaving to “pursue opportunities andapply her talents in a more established business environment.” BobMylod, the senior vice president-finance, will replace her.
After starting out two years ago offering name-your-own priceairline tickets, Priceline expanded into other areas, includingrental cars, home mortgages, telecommunications services, gas andgroceries.
The company’s name-your-price business model was initiallyhailed by analysts as an ingenious use of the Internet that couldrevolutionize retail pricing.
But Priceline has been beset by problems in recent months. Lastmonth its grocery and gasoline licensee, WebHouse Club, announcedit was shutting down. Priceline’s shares plunged 38 percent the dayof the announcement.
After the company went public in March 1999, its stock soared toas high as $165 per share.
In the last year it sold for as much as $104.25 per share. Butit has traded between $5 and $6 per share. It closed at $6.85 pershare Thursday but was down to $5.25 per share in after-hourstrading.
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Martha Stewart Doubles Earnings
Media and entertainment companyMartha Stewart Living Omnimedia posted today a more than 100 percent jump in third-quarter earnings, easily beatinganalysts’ expectations, and said it is comfortable with thehigh end of estimates for the fourth quarter and expects toexceed them for the year.
The New York-based company run by media icon Martha Stewartsaid net income for the third quarter surged to $3.82 million,or 8 cents a share, from $1.88 million, or 4 cents a share, inthe year-ago period.
Wall Street analysts on average were expecting the companyto post a profit of 1 cent per share, according to researchfirm First Call/Thomson Financial. Revenue rose 24 percent to$61.9 million from $49.8 million in the third quarter of 1999.
Steward, the chairman and chief executive, said in astatement she expects the company will exceed analysts’consensus estimate of 34 cents a share for fiscal 2000 withearnings expected to come in at about 41 cents a share. Thecompany also said it is comfortable with the “high end” ofearnings estimates of 10 per share for the fourth quarter.
In 2001, the company expects double-digit growth inrevenues and earnings before interest, tax, depreciation andamortization (EBITDA) in the publishing and merchandisingsegment, while television EBITDA is expected to be flat. TheInternet and direct commerce segment expects revenue growth inthe double-digits and an EBITDA loss of between $16 million to$18 million.BACK TO TOP
Cigna’s Q3 Operating Net Rises
Cigna, the No. 3 U.S. health insurer, said todaythird-quarter earnings rose 20 percent on a per-share basis, handily beating Wall Street expectations on the strength ofmembership growth and premium rate increases in the health care segment.
The Philadelphia-based company, which ranks behind managed care industry leader Aetna and No. 2 UnitedHealth Group, reported third-quarter operating income from continuing operations of $281 million, or $1.76 per share, compared with $1.47 per sharein the year-earlier quarter, excluding certain nonrecurring charges.
The results beat analysts’ consensus forecast of $1.68 a share, as compiled by research firm First Call/Thomson Financial.
Cigna shares finished off $1.95 at $120 on the New York Stock Exchange Wednesday, near a 52-week high of $123. The stock has a 52-week low of $60.75.
Cigna, which also sells life insurance, annuities and pension products, said total revenues rose 7 percent to $5.03 billion from $4.69 billion. The increase wasprimarily due to growth in its Employee Health Care, Life and Disability Benefits segment, which includes health maintenance organisation (HMO) and indemnityinsurance operations, the company said.
HMO operating income increased 15 percent to $126 million from pro forma HMO operating income for the same quarter of 1999. This increase was largelyattributable to membership growth and rate increases in the medical managed care business and higher earnings in speciality health care operations, Cigna said.BACK TO TOP
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