CMGI Internal Guidance Breaks Major Move (CMGI)

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After the close of trading today, CMGI Inc. (NASDAQ: CMGI) reported its quarterly numbers.  Unfortunately for holders, the reaction isn’t a strong one. 

The ModusLink owner and incubator for tech and alternative energy announced a loss at -$0.05 EPS on $239.2 million in revenues.  There was only one real estimate out there and that was for $0.08 EPS on $282.1 million in revenues.  Keep in mind that the company counted its non-GAAP operating income of $7.6 million and it also claimed a 230 basis point improvement in gross margin.  Its operating income after items was listed as $10,000.00.

The company lowered its own prior fiscal 2008 guidance and put the new range at $1.05 to $1.10 Billion in revenues with operating in come at 2% to 2.5% of revenues.  Back in March, the company guided to a range of $1.10 to $1.15 billion in revenues and operating income, before any restructuring expenses, to be approximately 2.0% to 2.5% of revenue.   The company also noted that restructuring charges would run in the $5 to $8 million range this year, which looks in line with prior targets it set.

Its cash and cash equivalents and available-for-sale securities of $248.6 million at the end of the third quarter and continued to have no outstanding bank debt.

Unfortunately for shareholders, the stock is being hit in after-hours trading by about 14% down to $12.83.  Before this drop shares had recovered almost 40% from the March lows.  Missing a single estimate is one issue, but lowering your own guidance is another.  That’s holding true even for this cult stock.

Jon C. Ogg
June 9, 2008