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CNET Networks reported Q4 results, beating the consensus EPS estimate by a penny. But following in the footsteps of Monster Worldwide and Drugstore.com, CNET was crushed in late trading due to its lower than expected guidance for Q1. Here are details of the results and guidance:


Q4 results

  • Total revenues were $89.2 million, up 21% year over year.
  • Interactive revenue was $80.1 million, up 29% year over year.
  • Operating income was $5.3 million, but included an $8.9 million non-cash asset impairment charge associated  with Computer Shopper magazine.
  • Operating income before depreciation, amortization, and asset impairment was $20.5 million, up 55% year over year.
  • Operating margin was 23% (excluding D&A and the asset impairment charge), up from 18% a year earlier.
  • EPS of $0.09 excluding $0.03 of charges beat consensus by a penny.
  • Net income was $14.5 million, excluding charges of $5.4 million.
  • The number of unique users reached 103 millionon a monthly basis  during the quarter, up 55% year over year.
  • Average daily page views were 85 million, up 94% year over year.
  • "Growth in monthly unique  users and average daily page views reflects strong organic growth as well as acquisitions, including the company's  acquisition of Webshots, which closed in the third quarter of 2004."

Guidance

For the first quarter of 2005, management anticipates total revenues of $71.0 million to $74.0 million. Interactive revenues are expected to be in the range of $66.0 million to $68.0 million, and publishing revenues are expected to be between $5.0 million and $6.0 million. Management estimates an operating loss between $600,000 and $2.6 million during the first quarter, and operating income before depreciation and amortization of between $4.0 million and $6.0 million for the quarter.

For the full-year 2005, management is estimating total revenues will be in the range of $340.0 million and $355.0 million. Management expects Interactive revenue to be in the range of $310.0 million to $320.0 million, and publishing revenues are expected to be between $30.0 million and $35.0 million. Operating income before depreciation and amortization is expected to be between $63.0 million and $69.0 million. Full-year 2005 guidance does not reflect any stock option related expenses.

Of note:

  • Q1 revenue guidance of $71-74 million was below consensus of $77.6 million.
  • The mid-point of CNET's full year revenue guidance of $340-355 million was below consensus of $350.3 million.

One year CNET chart below.
Cnet

Full disclosure: at the time of writing I'm short CNET.

Source: CNET latest Internet stock to be chopped (4Q04 earnings)