Critical Path Reports Deep Loss; Pushes Back Profitability Forecast
The company, which had projected it would turn profitable in the fourth quarter of 2000, instead posted a loss of $11.5 million, or a loss of 16 cents per share. It also cut its forecast for the first quarter of 2001 and the full year. Analysts had been expecting Critical Path to post a 1-cent profit.
The revenue shortfall was blamed on the company's auditors, who would not allow it to recognize $7 million in sales of software that had been licensed for resale. In addition, foreign exchange currency translations also affected Critical Path's revenue. The company derives about one-third of its revenue from outside the United States.
Revenue for the fourth quarter was $52 million, up more than 500 percent from the $8.2 million revenue posted a year earlier. The company was founded in 1997.
For the first quarter of 2001, Critical Path now expects to post revenue of between $54 million and $56 million, about 19 percent below analysts' estimates. It forecasts a loss per share of between 15 cents and 16 cents.
Critical Path said it expects to record revenue of between $255 million and $260 million for 2001 and that it should attain profitability in the third quarter.
"It is disappointing to lower expectations for Critical Path, but macroeconomic forecasts and reports from leaders in the technology space lead us to believe it is prudent to be conservative at this time," said Doug Hickey, the company's CEO.