Technology TransactionsHomestore Lowers Third Quarter Estimates
Reaching far beyond Manhattan, Washington, and Pennsylvania, the terrorist attacks of September 11th have also impacted California-based Homestore.com. On Wednesday, company shares (Nasdaq: HOMS) dropped as low as $5.66 following reduced third-quarter estimates. The stock closed at $6.20, down $.85 (12.06%) for the day.
According to the company, "the attacks compounded an already deteriorating advertising market and caused a loss of business due to the cancellation of sales visits to professional customers."
As a result, says the firm, "the company now projects third quarter revenue to be approximately $114 million to $118 million resulting in a third quarter pro forma loss per share, excluding nonrecurring items, of $0.01 to $0.06."
Earlier, on September 6th, the company said that it was "reaffirming revenue guidance of $134 million for the third quarter of 2001 and pro forma earnings per share guidance, excluding certain items, of $0.16."
In effect, the new pro forma estimate is $.17 to $.22 lower than projections made four weeks ago.
On July 25th, the company reported revenues of $129.3 million for the second quarter, "a 79 percent increase over pro forma revenue of $72.4 million for the second quarter of 2000."
"Pro forma net income for the second quarter was $14.5 million," said the company, "or $0.13 per share compared to a pro forma net loss of $29.8 million, or $0.29 per share, for the second quarter of 2000."
However, the company also reported different results when using generally accepted accounting principles or "GAAP" accounting.
"On a GAAP basis, the company"s revenue for the second quarter of 2001 was $129.3 million, compared to $50.2 million for the second quarter of 2000. The net loss for the second quarter of 2001 was $72.1 million, or $0.67 per share, compared to a net loss of $24.7 million, or $0.31 per share, for the second quarter of 2000."
Tough Times On Wall Street
The last quarter has been rough for most firms. Between the last day of trading in the second quarter, June 29th, and the last day of the third quarter, September 28th, the Dow fell 15.76 percent while the NASDAQ dropped 30.69 percent.
Much of the loss followed the terrorist attacks on September 11th, but not all. Between June 29th and September 10th the Dow was off 8.54 percent and the NASDAQ was down 21.59 percent.
Few companies have been able to weather the tough times on Wall Street and that has also been the case with Homestore. Priced at $34.68 on June 29th, the company fell to $15.99 on September 10th -- a drop of $18.69 or 53.89 percent. By September 28th, Homestore was down to $7.65, a figure 77.94 percent below the second-quarter close.
DJIA
Nasdaq
Homestore
June 29th
10,502.40
2,162.31
$34.68
Sept. 10th
9,605.51
1,695.38
$15.99
Change
-896.89
-466.93
-$18.69
Change
-8.54%
-21.59%
-53.89%
DJIA
Nasdaq
Homestore
June 29th
10,502.40
2,162.31
$34.68
Sept. 28th
8,847.56
1,498.80
$7.65
Change
-1,654.84
-663.51
-$27.03
Change
-15.76%
-30.69%
-77.94%
Homestore is supporting the disaster relief efforts resulting from the attacks on Sept. 11, including the Realtors Housing Relief Fund established to help pay mortgage and rental costs of the affected families and The New York Police & Fire Widows" & Children"s Benefit Fund.
For more articles by Peter G. Miller, please press here.