Will, I think these deals will provide an answer to our third- quarter profit shortfall.” Florence Decoste, the CFO of Space Info Corp. (SI), was all smiles as she placed several thick files on Will Blackburn’s desk. “We’ve got revenue of $ 5 million here, along with an increase in the fair value of an investment that will easily push us over our third- quarter earnings targets. We’re convinced that fourth- quarter economic recovery will solidify our core mar-kets, so we will have healthy trends by the end of the fiscal year.”
Will, one of the company’s financial analysts, was pleased with the news that financial results would improve. The accounting and finance area group of SI had been tense all week, ever since projected third- quarter data for the company had surfaced, which indicated the potential for a significant shortfall. SI is a public company, offering on- line green pages (product and contact information) coupled with software that enables companies to gather information concerning potential customers’ hits on web pages. This information could then be used to target particular users and geographic areas.
SI felt its business model was strong, but in a soft economy, the company was struggling. Senior management was concerned that analysts’ expectations be met for third quarter revenue and profit projections. The company’s share price had already dropped from a high of $ 12 to $ 2.06, and further declines were feared.
As Will, prepare the requested report for the Executive Committee.