1st Oct 2014 07:47
LONDON (Alliance News) - Shares in online video advertising services company Blinkx PLC were trading down 12% Wednesday morning, as it warned that revenue had continued to slow in its second quarter.
As a result of this slow down, Blinkx now expects revenue in the half year to end-September to be between USD102 million to USD104 million, lagging behind USD111.6 million a year before. It said it expects its earnings before interest, tax, depreciation, amortisation, acquisition charges and exceptional costs to be approximately break even.
Blinkx saw revenue slow in the latter half of its first quarter, hampered by lower demand than expected for its desktop division, compounded by the lingering effects of a disparaging blog about its business in January.
The blog, written by an associate professor at Harvard Business School, Benjamin Edelman, made allegations about the company's business model. Blinkx refuted the claims, and at that time noted that Edelman had "prepared a portion of this article at the request of a client that prefers not to be listed by name".
In February the article was amended to take out a key assertion. The professor had claimed that a company called Local Weather had deceptive advertising practices, pretending to be independent while actually being part of Blinkx. However, this was found to be untrue, with the real independent owner of Local Weather defending Blinkx.
Blinkx said Wednesday that the late first quarter trend had continued into the second quarter, amplifying its seasonally slower summer months.
However, it noted that it has seen sequential month-on-month growth since July, which it believes means it has reached "an inflection point". It will continue to focus on its mobile segment, which is expected to contribute around 20% of revenues in the first half.
"The past six months have been transitional for blinkx, which operates in an evolving industry moving toward emerging mobile models," said Chief Executive Brian Mukherjee, "We have taken decisive steps to fortify our business model and realign our resources to target growing areas of the sector, and we feel confident in our prospects going forward."
Blinkx said it will provide a more detailed update and outlook with its interim results November 11.
Shares in Blinkx were trading down 12% Wednesday morning at 31.17 pence, having fallen to 26.52 pence earlier in the morning, a new 52-week low.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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