[email protected] (Nasdaq: ATHM) dropped 79 U.S. cents to $4.08 in morning trading Tuesday, after saying results for thefirst quarter and the rest of 2001 will be hurt by a weak advertisingmarket.
Moreover, Excite said it needs to raise $75 million to $80 million by theend of the second quarter to avoid “a material adverse impact on thecompany’s operations and liquidity.”
The company said that it signed a non-binding letter of agreement with AT&T (NYSE: T) that would provide $75 million to $85 million through the restructuring of afiber agreement. Excite said it is also seeking additional debt and/orequity financing, and considering the sale or restructuring of mediaoperations that do not directly support its broadband business.
The Redwood City, California-based Internet service provider (ISP) said it expectsrevenue for the quarter ended March 31st of $140 million to $145 million, upfrom $138 million in the year-earlier quarter. The loss per share, however,will widen to 14 to 15 cents per share before amortization of goodwill andother items, from a penny per share a year earlier.
Slumping ad spending “adversely affected” the company’s narrowband mediabusiness, Excite chairman and chief executive officer George Bell said.
That means”significantly lower revenues, greater operating losses and more rapid useof cash than previously forecast for the balance of 2001,” the company said,adding that it plans to take an “impairment charge” to first-quarter resultsto cover the media business.
“We must focus our financial and human resources on our core business, andmake certain that we have the cash resources and the cost structure we needin order to realize the tremendous broadband opportunities before us,” Bell said.
Excite said it plans to report first-quarter results and issue a moredetailed outlook on April 23rd.
Cash and short-term investments totaled about $105 million at quarter’s end,down from $201 million on December 31st, Excite said.
“Our core broadband business is strong,” said Bell. “Subscriber growthcontinues at a rapid rate, our network is performing at record levels ofscale and reliability, and we see important new opportunities developing inareas such as content delivery, wholesale services and premium services.”