Product upgrades buoy Macromedia earnings
Published: 18 Jul 2002 08:59 BST
Web software maker Macromedia trimmed its losses substantially for its fiscal first quarter, buoyed by one of the most ambitious product upgrade cycles in the company's history.
The company posted a loss of $4.3m, or 7 cents a share, for the quarter ended 30 June. That compares with a loss of $111.8m, or $1.94 per share, for the same period a year ago and $80.5m, or $1.37 a share, in the previous quarter. Revenue for the quarter totalled $84.2m, compared with revenue of $88.7m a year ago and $75.6m last quarter.
Excluding one-time charges, Macromedia squeaked out a profit of $450,000, or a penny per share. On that basis, analysts polled by First Call had expected a break-even quarter.
Macromedia, which makes products for designing and delivering Web pages and applications, has suffered along with the rest of the Internet economy, sliding from a modest profit in its 2001 fiscal year to a steep loss for its recently concluded fiscal 2002.
The company began positioning itself for a comeback early this year with the release of a dramatically expanded new version of its Flash animation software, followed by revamped versions of core products for Web design and serving applications. All have been born the MX family name and been tied around a promise to make Web sites more useful by integrating applications with content.
"We're pleased with our progress this quarter," chief executive Rob Burgess said in the earnings statement. "We successfully launched our most ambitious product agenda ever with the MX family, and we delivered against our financial targets in this tough economy."
Burgess said in a conference call with financial analysts that while the new MX products have generated a lot of interest among current Macromedia users, economic conditions have kept sales from booming.
"We've put out really, really strong products, but the upgrade cycle is going to take time while people are sitting on their wallets," he said. "It's a tough environment, and companies just aren't that interested in doing new things."
The company consequently expects revenue and earnings for the second quarter to be about even with the first.
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