First Albany Cuts Rating on CMGI Shares to Neutral

Analyst Denise Rush thinks it will take time before CMGI realizes significant improvement in margins

Internet incubator CMGI Inc. (CMGI ) sees $335M-$345M revenue in Q2. First Albany downgraded its investment rating on the shares to neutral.

Analyst Denise Rush says CMGI said it will miss financial targets for Q2; the revised guidance reflects lower revenues and increased restructure costs. Rush says 2001 revenue, EBITDA (earnings before interest, taxes, depreciation and amortization) and cash burn rate targets are under review, and will be discussed further at the company's Q2 conference call on March 31. She thinks the company's initiatives toward enterprise-driven revenue will need time to take hold before CMGI realizes significant improvement in margins. The analyst also notes limited visibility on overall demand environment, as well as the potential for further downsizing, consolidation, and divestitures.

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