Shares of 24/7, Engage plunge on earnings

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Shares of online advertising companies 24/7 Media and Engage dropped Nov. 9 after both warned of slower near-term growth and earnings. 24/7 Media shares dropped 36.7% to close at $2.94, hitting a new 52-week low and down sharply from the midyear high of $65.25. New York-based 24/7 Media said it would cut 200 jobs and expects tempered growth until mid-2001. It posted a wider-than-expected pro forma loss, excluding items, of $22.5 million.

Internet incubator CMGI's Engage issued another warning about its fiscal first-quarter 2001 revenue due to market-related and internal factors. The company also said CEO Paul Schaut, 41, would resign and be replaced by Anthony Nuzzo, 49, a former Marsch & McLennan executive. Engage shares tumbled about 28.8% on the day to close at $2.47 Nov. 9. Shares of CMGI fell 17.8%, to close at $17.94. Engage estimated sales in the quarter ended Oct. 31 totaled $40 million to $42 million, less than the $66.7 million it reported in the period ended July 31. Analysts had expected first-quarter revenue of about $63 million. The company said it plans to release full results Dec. 12.

Copyright November 2000, Crain Communications Inc.

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