CNET Slips to Q2 Loss, Lowers Guidance

CNET Networks posted a second-quarter net loss of $76,000 ($0.00 per share) due to costs from an investigation of backdated stock options, on sales growth of 5.2% to $97.2M. Analysts had expected CNET to break even on sales of $100M. CNET lowered its full-year EPS and sales guidance to $1.30-1.39 on $405-430M, from $1.37-1.47 on $425-445M previously. Analysts had forecast EPS of $1.39 on revenue of $431.2M. Shares of CNET gained 1.1% to $8.35 in thin after-hours trading Thursday, after losing 2.8% to $8.26 during the regular session. In a July 13 note, Stifel Nicolaus analyst Kit Spring said, "CNET is a rare media Internet asset left with scale, likely to be coveted by major media companies such as NWS, DIS, VIA, IACI, or NYT, in our view, who are trying to catch up to Internet leaders... We believe CNET shares may be ripe for an activist hedge fund as management seems to believe that a stand-alone strategy makes more sense." CNET is down 9.1$ YTD.

Sources: Earnings Call Transcript, Press release, AP, Bloomberg, MarketWatch
Commentary: Is CNET Networks Worth a Look? • Why CNET, TheStreet.com, WebMD, PlanetOut, The Knot and Answers.com Won't Be Acquired • CNET: Possible 50% Upside In Takeover Scenario
Stocks/ETFs to watch: CNET. Competitors: TSCM, YHOO

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.

Comments

[Ralph F:]

Not sure about the EPS numbers. The JPM Securities analyst said this:

"We are lowering our revenue and EPS estimates modestly to account for slower subscription revenue. Our 2007 revenue estimate is going from $61 million to $60 million and <b>EPS from $0.55 to $0.52</b>. For 2008, we are lowering our revenue estimate from $71 million to $70 million and <b>EPS from $0.70 to $0.68</b>."

2007 Jul 27 10:34 AM