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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: DubM who wrote (11558)	9/29/1999 7:49:00 PM
From: DubM	Read Replies (2) \| Respond to of 12468

And another article: WinStar Shares Fall for 2nd Day After Company Lowers Guidance San Francisco, Sept. 29 (Bloomberg) -- WinStar Communications Inc. shares fell 7.3 percent, following a 22 percent drop yesterday, after the telecommunications company guided analysts to lower their revenue expectations for 2000. The lower revenue forecast is due to WinStar focusing more on selling phone services to customers whose offices are on WinStar's network, rather than selling to all customers, even if they're served by lines leased from competitors, said Bill Vogel, the company's senior vice president of strategic planning. Selling more services to so-called ``on-net' customers cuts WinStar's costs while boosting its gross margin to 70 percent from 10 percent to 20 percent. The strategy also allows WinStar to sell a full range of telecom services, including voice transmission. ``Analysts' estimates will show strong growth, with revenue growing by about $200 million next year' to about $650 million to $670 million, Vogel said at a Banc of America investment conference in San Francisco. That's more than 50 percent growth from this year, Vogel said. Still, some analysts had pegged WinStar's 2000 revenue as high as $1 billion, and many were projecting about $700 million. WinStar shares today fell 3 1/16 to 39 1/8. With the strategy shift, WinStar ``increases its exposure to the value-added side of the business, where margins are higher and price competition is virtually nonexistent,' said John Bauer, an analyst at Fahnestock & Co. who rates WinStar ``buy.' Concentrating on voice and long-distance service, which are commodity businesses, is less profitable, he said. Cash Flow Loss Vogel also said the company's cash flow loss will be cut in half between 1999 and 2000, with a 2000 cash flow loss ``in the $140 to $150 million range.' Cash flow -- or earnings before interest, taxes, depreciation and amortization -- is frequently used by analysts and investors to gauge the performance of indebted companies because it focuses on the underlying business and ignores interest payments and non-cash charges. ``The core business is in great shape,' he said. ``There's no earnings hiccup in store for the third quarter.' Revenue is expected to rise to $420 million to $430 million in 1999, up from $266 million last year, he said. WinStar is one of a new breed of phone companies using wireless links to provide businesses with phone, fax and Internet services with dinner-plate-sized antennas mounted to their buildings. Analysts said the company's business is sound and yesterday's stock decline was prompted more by a lack of information than by fundamental concern about the business. Sep/29/1999 18:51 For more stories from Bloomberg News, click here. (C) Copyright 1999 Bloomberg L.P.