Excite@Home Sees Profit In 4Q, Excluding Goodwill
NEW YORK -- Excite@Home (ATHM) expects to report a profit - excluding goodwill amortization from acquisitions - for the first time in the fourth quarter, followed by increasing profits in 2000.
Excite@Home Chief Financial Officer Ken Goldman said the company reported a loss of $4 million in the third quarter, "and our goal is to turn that positive this quarter." He didn't specify a per-share estimate; the First Call/Thomson Financial analysts' consensus predicts break-even results in the fourth quarter. The high-speed Internet service provider and Web portal operator lost one cent a share in the third quarter, excluding goodwill.
In the year-ago fourth quarter, the company posted a loss of three cents a share, excluding goodwill and adjusted to reflect the merger of Excite and AtHome.
In a presentation at the PaineWebber media conference here Wednesday, Goldman said he expects the company to post increasing quarterly profits throughout 2000. The First Call consensus predicts earnings of 16 cents a share in 2000. Goldman projected revenue of $420 million in 1999, rising to $700 million in 2000 and $2 billion in 2002.
Excite@Home expects to close next week on its $780 million acquisition of Bluemountainarts.com, an online greeting card provider, Goldman said. The value of the deal could rise to about $1 billion if Bluemountain meets certain financial performance goals.
When it announced the pricey Bluemountain acquisition in October, Excite@Home billed it as part of a strategy to expand its "narrowband" offerings while it builds its network of cable-modem, high-speed Internet subscribers. Narrowband refers to the Excite Web portal, most users of which still have slower, dial-up connections.
Goldman said Excite@Home would pursue additional acquisitions to beef up its narrowband offerings, but none as large as the Bluemountainarts purchase. With these acquisitions, Goldman expects Excite@Home's content to reach about 45% of all Internet users in 2000, up from the 36% Media Metrix Inc., the Web rating service cites for October.
The At Home business, which provides high-speed Web access using cable modems, recently passed the 1 million subscriber mark. Goldman noted that this solidifies its position as the No. 1 provider of high-speed Internet service.
Under exclusive deals with more than 20 cable operators, Excite@Home has the opportunity to sell its service to millions more cable subscribers. Its current penetration rate for this market is about 4.5% to 5%, Goldman said. He expects that rise to about 8.5% to 9% in 2000.
Goldman reiterated the company's position that it was not surprised by the letter jointly sent to the Federal Communications Commission by AT&T Corp. (T) and MindSpring Enterprises Inc. (MSPG). In the letter, AT&T said it supported the notion of opening up its sprawling cable systems to multiple Internet service providers after its exclusive deal with Excite@Home expires in 2002. MindSpring said it, too, supported the concept, but it wants AT&T to find a way to open its system even sooner.
Goldman said he believes AT&T wants a long-term relationship with Excite@Home after the exclusive contract expires. He also pointed out that Excite@Home has more than 20 other exclusive cable contracts, some of which run until 2007.
-By Peter Loftus, Dow Jones Newswires; 201-938-5267;
e-mail: peter.loftus@dowjones.com |
