CNET Loss Widens; Sells Webshots Unit for $45M

Web publisher CNET Networks said Thursday its Q3 loss widened, but posted a 7% revenue gain. It also announced the sale of its Webshots online photo unit to American Greetings for $45 million in cash, effective immediately. Shares gained 4.5% to $8.39 in extended trading. Q3's net loss was $16.6 million ($0.11/share), compared to a $2.3 million ($0.02/share) loss a year ago. Revenue rose to $99.5 million from $93.3 million, slightly ahead of Wall Street targets of $99.4 million. For Q4, CNET expects total revenue between $119 and $125 million, and EPS of $1.27 to $1.30, excluding Webshots. According to a Reuters poll, analysts were expecting EPS of $1.33 on revenue of $129.55 million; analyst figures likely include revenue and earnings from Webshots. "We are building a vibrant company and have made great progress during the quarter," said CEO Neil Ashe. "Strategically, financially, and operationally we are making the changes necessary to seize the long term opportunity and create value for all stakeholders." During the company's earnings conference call (full transcript later), Ashe commented, "We consider ourselves in the market for acquisition targets." CNET has itself often been mentioned as a possible target (full story).

Sources: Press release I, II Reuters
Commentary: Why CNET Won't Be Acquired • Is CNET Networks Worth a Look?
Stocks to watch: CNET. Competitors: YHOO, TSCM, DJ, NYT
Earnings call transcript: CNET Networks Q2 2007

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Comments

[Frank Li:]

How much did they buy webshots for?

2007 Oct 26 09:00 AM

[Koby Menach...:]

"CNET had acquired the business in 2004 for $60 million in cash and $10 million in deferred compensation."

from: seekingalpha.com/artic...

2007 Oct 26 03:04 PM