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Excite meets, revenue falls
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July 23, 2001: 5:04 p.m. ET
Excite@Home reports wider loss than year-ago period, but meets Street
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NEW YORK (CNNfn) - Excite@Home Corp. reported an operating loss and revenue that widened from the same quarter last year, although the results met Wall Street's expectations.
After the close of trading, the high speed Internet service and content provider said it lost $65.1 million, or 16 cents per share, for the quarter, excluding extraordinary charges. That was in line with the expectations of analysts polled by earnings tracker First Call and compares with a loss of $38.6 million, or 10 cents per share, during the same quarter last year.
At $138.6 million, Excite@Home's second-quarter revenue fell 7 percent from the $148.7 million it reported during the same period last year.
The company's net loss for the quarter, which includes a range of one-time charges for items including investments losses and restructuring charges associated with work force reductions, was $346.3 million, or 85 cents per share. That compares with a loss of $668.3 million, or $1.69 per share, in the second quarter of 2000.
The decrease in net loss compared with the year-ago period was driven primarily by reduced expenses for the amortization of goodwill and other intangible assets following write-downs of assets in prior quarters, the company said.
The decrease in second-quarter revenue was driven by a decline in media and advertising sales, which was partially offset by strong growth in residential broadband subscription revenue, the company said.
Media and advertising revenues dropped 62 percent from the same quarter in 2000 to $28.6 million.
Excite@Home (ATHM: Research, Estimates) derives its revenue from subscriptions to its high-speed Internet service as well as from advertising sales through its Excite.com Web portal. That unit has been a drag on earnings in recent quarters amid a sharp slowdown in the online advertising market.
When the company reported its first-quarter results, it reported a loss that was even wider than executives had told the Street to expect when executives warned of a quarterly shortfall just a week earlier, pinning the blame for the miss squarely on the poor performance of the media business.
Excite@Home has been considering selling off its Excite.com portal and other portions of the media business as one of its options to deal with a cash crunch, but executives have said they cannot be certain when or if that will happen.
The company said it ended the quarter with $183.4 million in cash and marketable securities, compared with $104.5 million as of March 31, 2001.
During the quarter, Excite@Home said it successfully secured $185 million in through the sale of convertible notes and through the restructuring of its optical fiber backbone agreement with AT&T. The company also said it is continuing to pursue alternatives that would reduce its financial exposure to narrowband media operations, which continue to generate financial losses.
The company said it will need to raise additional funds before the end of 2001 to support its operations, with potential sources including sales of certain media operations and financing transactions.
"Despite facing a number of tough challenges, we executed solidly this quarter, posting results in line with our targets and delivering ever-higher levels of network reliability and customer satisfaction," Patti Hart, the company's newly minted chairman and CEO, said in a statement.
Shares of Excite@Home fell 6 cents to $2.10 in after-hours trading. 
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