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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 226.99

-1.1%

Dec 8 3:59 PM EST

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To: Oeconomicus who wrote (143734)	7/16/2002 11:18:15 AM
From: H James Morris	Read Replies (1) of 164684

Bob, what might this be a sign of? Looking ahead, Nextel said it's on track for strong results in the second half of the year. The carrier raised its estimate of annual operating cash flow - earnings before interest, taxes, depreciation and amortization -- to $3 billion from a previous target of $2.5 billion. In the second quarter, domestic cash flow rose 69 percent to $816 million from $483 million a year earlier. Interest expenses tallied $269 million. Cash flow is a key measure of financial health in the wireless business that can indicate whether a company is moving toward profitability. Yet the use of so-called Ebitda numbers has come under fire lately because it's failed to predict the failure of many telecom firms. Analysts say investors have to factor in high payments for companies with large debts. When cash flow doesn't outgrow debt payments, companies need to raise more money in financial markets - a difficult strategy in the current economic climate. Nextel, for its part, took major steps in reducing its debtload by $1.5 billion during the quarter, which will save the company $2.5 billion in "foregone interest, principal and dividends" over the next nine years. The carrier ended the quarter with $13.4 billion in long-term debt, down from $13.9 billion a year earlier. The value of its preferred stock -- debt that can be converted into shares -- fell to $1.79 billion from $2.18 billion. During the quarter, Nextel recorded a $202 million gain on the redemption of preferred stock and a $139 million gain on the early retirement of debt. It also incurred a $99 million loss related to the bankruptcy of its NII Holdings subsidiary and $59 million in charges stemming from the decline in value of its investments.

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