Compuserve warns of second quarter loss to follow Q1 deficit

Compuserve expects a further loss following its US$17 million deficit for its first quarter as a public company.

Compuserve expects a further loss following its US$17 million deficit for its first quarter as a public company. The loss, which Compuserve had warned investors about last month, was reported as bankrupt Europe Online shut down its service. (See Europe Online logs off.)

The US$17.1 million loss for the quarter that ended on July 31 was at the high end of the company's estimates. Net income was US$26.8 million during the period and revenues US$208.6 million, up 12% over the same period last year.

A drop in subscribers and high infrastructure costs and marketing investments led to the loss, company officials say. Next quarter, costs associated with the launches of CompuServe 3.0 and the Wow! service for teenagers will lead to a further deficit. The company plans, however, to reduce costs by US$20 million over the rest of its fiscal year by selling its Spry corporate computer software group and consolidating its US staff and offices, among other measures.

Compuserve is on the World Wide Web at http://www.compuserve.com.

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