OPWV ($19-- $21) reports proforma profit 11c vs 9c
(Adds byline, previous REDWOOD CITY; CEO comment)
By Yukari Iwatani
CHICAGO, July 23 (Reuters) - Openwave Systems Inc. <OPWV.O>
on Monday posted a fiscal fourth-quarter pro forma profit but
said it added fewer-than-expected wireless data subscribers and
revenue growth for its fiscal first quarter will be at the
lower end of its previously expected range.
Redwood, California-based Openwave, which licenses
messaging and mobile Internet software, said it added 4.2
million wireless data subscribers, falling short of JP Morgan
H&Q's expectation of 5.9 million subscribers.
Openwave blamed the shortfall on slower subscriber growth
in the highly penetrated Japanese market and large carrier
customers who switched to contracts with higher subscriber
activation and usage thresholds.
"Fundamentally, we see the market going through a number of
transitions and evolutions from 2G to 2.5G, so clearly we're
not seeing a lot of marketing effort by the carriers as they're
getting ready for the next-generation," Don Listwin, chairman
and chief executive of Openwave, told Reuters.
GPRS (Global Packet Radio Service), or 2.5G, is a stepping
stone to the next generation of networks known as
third-generation. GPRS offers faster access to data through
"always on" network connections. Current digital networks are
considered second-generation.
Listwin said he expects calendar year 2001 to continue to
be a transition year. However, he added, "I do think we're
going to see major growth opportunities in 2002 as these
transitions move through."
The company, which was created by a merger of Phone.com and
Software.com, said its pro forma earnings excluding special
items was $19.2 million, or 11 cents a diluted share, for the
quarter ended June 30 compared with a loss of 3 cents a share a
year ago. The merger was completed in August 2000.
Special items included merger and acquisition-related
charges and stock-based compensation.
Wall Street analysts' estimates ranged from 7 cents to 11
cents, with a consensus of 10 cents, according to data compiled
by research firm Thomson Financial/First Call.
Fourth-quarter net loss including special charges narrowed
to $142.2 million, or 84 cents a diluted share from a net loss
of $177.4 million, or $1.13 a share a year ago.
Total revenues for the quarter rose to $144.7 million from
$57.3 million a year ago.
Although Openwave said earlier that it expects quarterly
revenues to grow 10 percent to 20 percent sequentially in
calendar year 2001, the company said it expects revenues in its
September quarter to increase at the low end of that range due
to seasonal growth patterns.
Openwave said it still expects revenues to grow by 10
percent to 20 percent in the December quarter and reiterated
its expectation of a pro forma earnings per share of 43 cents
for calendar year 2001, excluding merger and
acquisition-related charges and stock-based compensation.
Shares of Openwave closed up $1.33, or 7.4 percent, at
$19.30 on Nasdaq.
((--Yukari Iwatani, Chicago Equities News at 312 408 8787,
chicago.equities.newsroom@reuters.com))
REUTERS
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