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Excite@Home beats Street
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July 19, 2000: 7:43 p.m. ET
Smaller-than-expected second- quarter loss on 57 percent revenue surge
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NEW YORK (CNNfn) - Internet service company Excite@Home on Wednesday posted a second-quarter loss that narrowly beat Wall Street estimates, spurred by a 57 percent jump in sales.
Redwood City, Calif.-based Excite@Home, a high-speed Internet access provider and Web content company, reported a pro forma loss of $45.3 million, or 11 cents a share, compared to a loss of $5 million, or one cent a share in the year-ago period.
Wall Street analysts had expected Excite@Home (ATHM: Research, Estimates) to report a loss of 12 cents a share in the quarter, according to earnings tracker First Call.
 Pro forma revenue rose to $157.6 million, up 57 percent from the $100.4 million it reported in the second quarter of 1999, and revenue of $138.1 million in the first quarter of 2000. Pro forma results combine the historical results of Excite and At Home, which merged last year, and other subsidiaries that have been obtained in 2000.
The company, the largest provider of cable links to the Internet, said its residential broadband subscriber base grew to more than 1.8 million, up 21 percent from about 1.5 million at the end of the first quarter in March, and was up 190 percent from a year ago.
But the addition of 300,000 subscribers in the quarter were fewer than the 350,000 added in the first quarter of this year, primarily as a result of a temporary interruption in the supply of cable modems to some of Excite@Home's cable partners, the company said.
Nevertheless, the company says it is still comfortable with its projection that it will add 400,000 subscribers in the third quarter, and reach 3 million subscribers by the end of 2000, and 10 million by the close of 2002.
Analysts said the results were positive, particularly considering the modem shortage.
 "The modem shortage was well documented," said UBS Warburg analyst Michael Wallace. "We knew it was going to bring the subscriber numbers in short. But they still managed to come in above the top and bottom line (forecast), which I thought was pretty good."
Analysts were also encouraged by Excite@Home's move to expand its international business. On Tuesday, Dutch Internet service provider Chello Broadband NV agreed Tuesday to merge with the Excite@Home's non-U.S. operations, a marriage that will create a market leader in high-speed Internet access outside North America.
The new company, Excite Chello, will operate in 15 countries in Europe, Asia and Latin America and has the exclusive right to serve some 30 million cable-connected homes. Executives told analysts that the new company is expected to go public within about 6 months after the deal is completed.
Traffic on the Excite network, which includes Excite@Home's high speed and traditional dial-up media properties, averaged 137 million daily page views in June, an increase of 69 percent over June 1999 and a decline of 5 percent from March 2000. The company attributed the sequential decline to fluctuations in traffic on Excite's Bluemountain.com electronic greeting card site, whose traffic is driven in part by the occurrence of holidays.
Looking ahead, the company said it expects to report a loss of about 10 cents a share in the third quarter and a loss of 5 cents a share in the fourth quarter.
The results were released after the close of trade on Wednesday. During the regular session, shares of Excite@Home eased 11/16 to 19. 
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