Webvan beats Wall Street estimates for 4Q

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Online grocery and delivery retailer Webvan Group reported earnings for the fourth quarter that beat Wall Street estimates Jan. 25 but matched its own revised estimates. However, the company also announced new measures to reduce costs, including plans to consolidate some of its operations in Los Angeles.

Webvan reported a pro forma net loss of 23 cents per share, or $109.1 million, for the fourth quarter ending Dec. 31. Net sales were $84.2 million, compared to sales of $19.8 million for the same quarter last year. Sales increased 325 percent for the year. All results included sales and losses from Homegrocer.com, the rival online grocer Webvan acquired last year.

For the fiscal year Webvan reported a loss of $413.2 million, on sales of $259.7 million, an increase of 642 percent over 1999, when sales totaled $35 million. Shares of Webvan rose more than 43 percent, to close the day at 78 cents. Company shares must rise above the $1 mark for 10 consecutive days or it will be delisted from the Nasdaq.

Webvan lowered its guidance on the amount of additional financing it will need to reach profitability; the company now said it will attempt to raise an additional $40 million to $60 million in capital by the end of 2001 or early 2002. Webvan also said it has indefinitely postponed the launch of its service in Northern New Jersey, Baltimore and Washington.

Copyright January 2001, Crain Communications Inc.

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