SwingTrade Member Forum

[Zephyr]

CMGI Announces Second Quarter Fiscal 2006 Financial Results; Delivers 9% Year over Year Increase in Revenue and Continues Investing in Strategic Initiatives

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...CMGI reported an operating loss of $1.7 million for the second quarter, compared to operating income of $10.8 million for the second quarter of fiscal 2005. The $12.5 million decrease in operating income was primarily the result of an $8.3 million decline in gross margins and a $4.3 million increase in restructuring charges, as compared to the same period of the prior year. The decline in gross margins was primarily attributable to $5.1 million of cost needed to support a larger than anticipated surge in demand for a significant client's products during the holiday season. Overall gross margins were also negatively impacted by price concessions made last Spring and form factor changes, partially offset by cost of material savings and increased business volumes. The restructuring expense during the second quarter primarily reflects actions taken to drive operational efficiencies in Europe and lower our overall costs. Management believes these restructuring actions will lower CMGI's operating costs in Europe by more than $5.0 million on an annualized basis.

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