Bidz.com: Q1 Outlook Light; SEC Starts Accounting Probe

Bidz.com (BIDZ) this afternoon forecast much lower than expected first quarter revenue, as the company shows the effects of the deep recession. For Q4, the online jewelry auction company posted revenue of $35.1 million, down 44.5% from a year ago, and well short of the Street consensus of $48.1 million. EPS of 13 cents a share, however, were in line with estimates. The outlook is troubling. For Q1, BIDZ sees revenue of $30 million to $32 million, with GAAP EPS of 4-5 cents a share. The Street consensus had been for $51.2 million and 13 cents. The company expects gross margin for the quarter of 30%, which would be down from 34.4% in the fourth quarter. And speaking of troubling, the company also disclosed that it recently was notified by the SEC “of a formal investigation relating to certain aspects of its inventory accounting practices, as well as other matters.” BIDZ said it will fully cooperate with the SEC on the matter. I said that the company remains confident its ... (link)