(Adds analyst quote, revenue, adjusted income, byline)
By Dana Ford
LOS ANGELES, Oct. 25 (Reuters) - U.S. media technology company CNET Networks Inc (CNET.O) reported a wider third-quarter loss on Thursday but posted a 7 percent rise in revenue and said it had sold its Webshots photo business to American Greetings for $45 million.
Shares rose more than 4 percent in after-hours trade and Sandeep Aggarwal, a senior research analyst at Oppenheimer, said the results topped his expectations.
CNET, publisher of a family of technology, lifestyle, and entertainment Web sites, posted a net loss of $16.6 million or 11 cents per share, compared with a loss of $2.3 million or 2 cents the year-earlier quarter.
The quarter’s loss included a $19 million non-cash goodwill impairment charge plus costs associated with an investigation of the company’s stock option granting practices. In September, the U.S. Securities and Exchange Commission closed its CNET investigation with no enforcement action recommendation.
Excluding those charges, CNET posted adjusted income of $6.9 million or 4 cents per share, compared with $9.9 million or 6 cents per share for the third quarter of 2006.
Revenue rose to $99.5 million, from $93.3 million a year ago and slightly topping Wall Street’s average target of $99.36 million, according to Reuters Estimates.
CNET said it sold its Webshots business to American Greetings, effective immediately, for $45 million in cash.
For the fourth quarter, the company expects total revenue, excluding Webshots, to be between $119 and $125 million. Operating income, including about $6 million in non-cash stock compensation, is expected to be in the range of $18.1 million to $22.2 million.
Earnings per share are expected to be in the range of $1.27 to $1.30, including stock compensation expenses and a tax benefit. Aggarwal called the targets “fine”.
Excluding Webshots, CNET expects annual revenue to be in the range of $400 million to $406 million. The company estimates an operating loss of between $300,000 and $3.7 million for the fiscal year, including $20 million in stock compensation expense. Earnings per share are expected to be in the range of $1.14 to $1.16, including stock expenses and a tax benefit.
Shares of CNET rose 36 cents to $8.39 in after-hours trade after closing at $8.03 on Thursday on Nasdaq.