Monster shares tumble on results, acquisition news
Shares of Monster Worldwide Inc. plunged today, a day after the company, which has much of its operations in Maynard, reported a fourth quarter loss and an analyst questioned the acquisition of a competing online help-wanted website.
Shares dropped $3.37, or 21 percent, to $13.05, making it he leading percentage decliner in the S&P 500 index.
The company reported a net loss of 2 cents per share yesterday, compared with a profit of 24 cents a year ago. For the year, revenue fell 33 percent, pushing profit down to 16 cents a share from $1.03 a year earlier. Fourth-quarter and annual results adjusted for one-time losses and gains met analysts expectations. (To read a Bloomberg News brief that appeared in today's Globe, please click here.)
Deutsche Bank analyst Jeetil Patel downgraded the company to "Sell" from "Hold," saying he expects continued revenue losses in 2010 and higher operating expenses. He shaved $1 off his price target for the stock to $11.
Patel said a revenue recovery at Monster would trail improvements in US unemployment. Sales likely wont recover until late 2010, he said.
The New York company announced plans to buy help-wanted site HotJobs from Yahoo Inc. for $225 million yesterday, a price tag that Patel said was too high. He said the company hasn't laid out how the deal will create cost savings and new revenue.
Credit Suisse analyst John Blackledge maintained his "Neutral" rating on Monster. He said while current operating results are not impressive, things are improving. Because the company's cost estimates were higher than anticipated, Blackledge cut the estimate for 2010 results to a loss of 25 cents per share from the previous 13-cent loss.
Analysts, on average, expect a profit of 8 cents.