Energy Business

CMGI Early Earnings Release (June 5, 2007)

Here is the brief summary for CMGI, Inc. (CMGI-NASDAQ) earnings:

Net revenue increased 6.5% from prior year to $282.1 million (WR Hambrecht estimate was $259.5M); Operating income improved to $0.9 million from an operating loss of $1.7 million in the prior year; Non-GAAP operating income increased to $7.5 million from $7.0 million in the third quarter of the prior year; Net income decreased to $9.4 million compared to net income of $21.7 million in the same period last year; Cash, cash equivalents and marketable securities at April 30, 2007 increased to $250.3 million from $213.0 million at April 30, 2006.  EPS came in at$0.02 (versus WR Hambrecht estimate of $0.02 EPS).

The current quarter gains included a $1.6 million gain from the acquisition of Mitchell International, Inc. by a third party and gains of approximately $2.5 million and $0.6 million, respectively, recorded to adjust previously recorded gains on acquisitions by third parties of WebCT, Inc. and Realm Business Solutions, Inc., two @Ventures portfolio companies, due to the release of funds held in escrow.

Excluding net charges, CMGI reported non-GAAP operating income of $7.5 million for the third quarter of fiscal 2007 versus non-GAAP operating income of $7.0 million for the same period in fiscal 2006.

Here is the outlook, and it looks a tad better than the $1.1 Billion previously noted: The Company currently expects revenues of approximately $1.10 billion to $1.15 billion in fiscal 2007. With respect to gross margin percentage, while the Company does not expect second half gross margin levels to approximate the levels achieved in the seasonally high second quarter, the Company continues to expect full year gross margin percentage to show improvement over the prior year.  Joseph Lawler, CEO: “Looking forward, our long-term goals are unchanged and we believe that executing on our overall strategy with both our supply chain and venture capital businesses will help us achieve growth and continue to improve our financial performance.”

Unfortunately shareholders have sold the news after the early news release, because shares are down over 7% at $2.30.  This news release came a bit earlier as mosttraders were expecting this to hit after the closing bell.  Shares had been up roughly 66% since its last report.

Jon C. Ogg
June 5, 2007

Jon ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.