Aether Up -2: Speculation Seen Ahead Of 2Q Report >AETH
By Michael Buettner
Of DOW JONES NEWSWIRES
RICHMOND (Dow Jones)--Shares of Aether Systems Inc. (AETH) rose sharply for
a second straight day as investors apparently have begun to focus on the
company's positives a month after an earnings warning sent the stock to an
all-time low.
ABN Amro Inc. analyst Keith Bachman suggested that Wednesday's
second-quarter results from 724 Solutions Inc. (SVNX), a rival wireless
communications company, prompted optimism for Aether. Bachman said 724 "had
a decent quarter," but that the company's results overall indicate
"visibility is still poor" in the industry. As a result, he said, the sharp
advance in Aether's shares is "not justified."
Aether officials were not immediately available for comment.
Salomon Smith Barney analyst John H. Hill said there is suggested investors
are betting that the company's second-quarter results, to be released after
the market closes Wednesday, will be better than expected..
Hill noted that Aether's stock has been beaten down over the past year. The
company, a provider of software and services for corporate wireless
applications, operates in a sector that "was widely expected to take off
(exponentially)."
Those expectations drove Aether's stock price to an all-time closing high of
$315 a share at the peak of the technology stock bubble in March 2000. Since
then, the price has fallen dramatically, posting an all-time low of $7.39 on
June 26.
That low came as Aether's announcement that it was lowering its revenue
forecasts for the second quarter and second half, saying growth would be
flat to modestly lower compared with the previous year. The company said it
still expects to have positive earnings before interest, taxes, depreciation
and amortization by the third quarter of next year.
He also said Aether has a solid balance sheet, which should enable it to
wait out the current sluggishness in the economy without undue financial
strain.
Aether's shares traded recently at $10.92, up $1.23, or 13%, after posting a
gain of $1.15, or 14%, on Thursday. Trading volume on Friday was at 1.5
million, about equal with the daily average.
-By Michael Buettner, Dow Jones Newswires; 804-698-7385;
michael.buettner@dowjones.com |
