Web slump hurts Macromedia earnings
Published: 25 Apr 2002 11:42 BST
Web software maker Macromedia posted a smaller-than-expected loss on Wednesday to end a year in which the company suffered along with the rest of the Internet economy.
The company, which primarily makes tools for creating Web pages and applications, reported a net loss of $80.5m, or $1.37 per share, for the fourth quarter of its fiscal 2002, which ended March 31. That compares with a loss of $21.8m, or 42 cents a share, in the same period a year ago, and $42.9m, or 74 cents a share, in the previous quarter.
For the full year, the loss amounted to $305.9m, or $5.26 per share, compared with a profit of $13.4m, or 24 cents a share, for the previous year.
Excluding one-time charges, the company recorded a loss of $6.1m, or 10 cents a share, for the fourth quarter, and $28.1m, or 48 cents a share, for the year. On that basis, analysts polled by First Call had expected a loss of 14 cents a share for the quarter and 52 cents for the year.
Total sales for the quarter were $75.6m, compared with $89.1m a year ago and $73.2m in the previous quarter. For the year, revenue totalled $324.8m, compared with $376.4m in 2001.
Macromedia has been hit hard by the decline of the Web economy, as most of its products are aimed at Web designers and developers. The company hopes to spark a business resurgence this year with the release of major upgrades to its leading software packages, starting with the March release of Flash MX, one of its primary tools for designing Web graphics and services.
The new products focus on integrating applications with Web pages, putting Macromedia in a more central position for Web development from its original emphasis on graphics, chief executive Rob Burgess said in a conference call with financial analysts. The end results include Web pages that are easier to navigate and that chew up less bandwidth, offering direct cost savings to customers, Burgess said.
"We're taking the company from technologies it might be nice to have to fundamental technologies you absolutely need to have," he said.
Burgess said he expects the company to return to profitability in the new fiscal year as the new MX products push revenue growth.
"Now we're at the start of a new year, and we really hope our vision of MX for a new year will really fuel a new era of growth for the company," he said.
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