Massachusetts' Cambridge Technology Partners Reports Quarterly Loss.(Knight Ridder/Tribune Business News)

Apr. 29--By now, executives at Cambridge Technology Partners Inc. must be asking themselves how they managed to arrive so late to the Internet party.

Yesterday, the former Wall Street darling reported a first-quarter loss of $4.3 million, on the heels of a $17.3 million loss in the previous quarter. In the past year, the company's stock has spiraled downward, and key employees have abandoned the firm.

Ironically, Cambridge Technology is struggling at a time when Web businesses and Fortune 1000 companies are clamoring for technology and consulting services to build their Web sites.

Analysts say Cambridge Technology failed to recognize that trend early in the game and is struggling to catch up. In contrast, rivals like Sapient Corp., also based in Cambridge, and Viant Corp. of Boston dedicated more resources to e-business and raced ahead.

Cambridge Technology has the distinction of being "a company in a hot space that's not putting in hot numbers," said William Loomis, an analyst with Legg Mason Wood Walker.

Investors have noticed. Two years ago, the stock was trading above $50 a share. Yesterday, it closed at $11 on Nasdaq Stock Market, down 18.75 cents.

Cambridge Technology's recent losses -- the first in at least seven years -- stem from its push into Web projects. Analysts anticipate the company will be profitable in the second half of the year.

"We're driving toward that," said Donna LaVoie, vice president of investor relations for Cambridge Technology.

In the first quarter, ended March 31, sales declined 2.5 percent to $147.6 million, compared to $151.4 million in the year-earlier period. The company posted a $7.5 million profit in first-quarter 1999.

Jack Messman, chief executive, said Cambridge Technology, is now ahead of schedule in shifting its business to Web projects.

"Worldwide, we're winning important e-projects with brand name clients that are key to our future growth," he said in a prepared statement.

Cambridge Technology's e-business clients include Textron Inc., best known as a manufacturer of aircraft, and the automotive giant JM Family Enterprises Inc. The technology firm also helped Wal-Mart Stores Inc., the world's largest retailer, integrate its off-line and online businesses.

In the business of building Web sites, companies that wield systems integration skills are hot commodities, analysts say. And even though Cambridge Technology has struggled with a wave of defections, it still has that technical savvy and "a lot of great minds," said Linda Cohen, an analyst and managing vice president at Gartner Group.

The company's challenge will be to get its customers up and running as quick as possible while solving management issues that have left employees shaken.

In July, the company's board of directors asked founder and chief executive James K. Sims to leave, according to recently filed court papers. In the suit, Cambridge Technology accuses Sims of "secretly" creating an e-commerce consulting firm at the same time he was being paid to advise his former employer following his departure.

"Maybe Jim [Sims] took a little long to leave, but when he left, things were kind of in an uproar," Cohen said. "It's hard for anyone or any group to really take the reins there in a strong way."

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