Loudcloud Posts Loss, But Beats Street

Loudcloud

For its quarter ended Jan. 31, Loudcloud had a loss of $34 million, or 51 cents per share, on sales of $16 million.

First Call estimates were for a loss of 58 cents per share.

This compares with a loss of $59 million, or $12.83 per share, on sales of $9 million in the year-ago period.

The company ended the year with $116 million in cash and cash equivalents. Analysts expected Loudcloud to round out the year with about $91 million in cash.

"We achieved [the quarter's results by focusing on cost control and resource management," said Rod Sherwood, company CFO and executive vice president. "We will continue to keep a sharp focus on these areas going forward."

Loudcloud's cash burn rate dropped from $35 million during its second quarter and $29 million in its third quarter to $25 million for the fourth quarter. Sherwood said infrastructure costs as a result of consolidation efforts will be cut by 50 percent in second-quarter 2002.

Loudcloud co-founder and Chairman Marc Andreessen said that despite a lagging economy, e-business initiatives remain a top priority for CIOs and enterprises.

"I've spent a lot of time with customers over the past few months and have found that they do have money allocated to e-business, they do view e-business initiatives as critical, and outsourcing their initiatives represents a critical cost savings to them," said Andreessen.

Loudcloud is increasing its focus on government agencies and allocating more resources to this area, as a result of increased demand from this sector, Andreessen said.

During the quarter, Loudcloud signed 30 orders with new and existing customers such as the U.K. Post Office, Knight Ridder, Orbitz and USA Today. Seventy-four percent of its revenue during the quarter came from enterprise accounts.

Loudcloud will add the Dallas Cowboys among others as new wins once its acquisition of Frontera is completed. Loudcloud intends to buy Frontera for $12 million to $13 million in stock.