Looksmart misses, offers weak guidance, CFO resigns, stock down 17% (LOOK 2Q05 earnings results)

| About: LookSmart Group, (LKST)

Looksmart (ticker: LOOK) reported Q2 2005 earnings results that missed consensus revenue and EPS estimates. Key stats:

Q2 Results
(all percentage changes and comparisons are year on year, unless stated otherwise)

  • Revenue fell 46.6% to $10.2 million, versus consensus estimate of $12.0 million.
  • Gross margin was 35.3% versus 42.5%.
  • Operating expenses fell 9.5% to $9.5 million.
  • Sales and marketing expenses fell 4.5% to $1.7 million.
  • Product development expenses fell 27.7% to $4.3 million.
  • G&A expenses fell 31.7% to $1.5 million.
  • Operating loss of $5.9 million versus a loss of $2.3 million.
  • Net loss of $5.4 million versus a loss of $1.2 million.
  • Diluted EPS loss of $0.05 versus a loss of $0.01, and versus consensus loss of $0.04.
  • Note: Operating expenses include a $1.9 million non-cash restructuring charge in Q2 2005, and a $420,000 non-cash restructuring charge in Q2 2004.

Q3 Guidance

  • Revenue of $7.0 - $8.0 million versus consensus of $12.7 million.
  • Traffic acquisition costs expected in the range of 56% - 59%.
  • Operating expenses of $8.0 - $9.0 million.
  • GAAP net loss of $5.5 - $6.5 million or a loss of $0.05 per share, versus consensus loss of $0.04.


  • Total paid clicks were 80 million versus 83 million in Q1.
  • Average revenue per click excluding the company's Run Of Site (ROS) product was $0.15, an increase of 7% compared to $0.14 in Q1.
  • CFO Lonergan announced his resignation.

LOOK chart.


Not subscribed to The Internet Stock Blog? You can get updated headlines for free by adding The Internet Stock Blog to your My Yahoo page. Just log into your My Yahoo
page, then go to The Internet Stock Blog and click on the "+ My Yahoo"
button on the top right of your screen. You can do the same for other sites, such as The China Stock Blog, ETF Investor, Radical Guides and Seeking Alpha.