Q4 Shortfall Sends Netopia Lower

Netopia, Inc. (Nasdaq: NTPA) plunged 2 1/4 to 9 3/16 Thursday after reporting fourth-quarter results that fell short of expectations. Analysts at several brokerage firms reportedly downgraded the stock.

The Alameda, California-based maker of Internet equipment and e-commerce Web platforms said revenue for the quarter ended September 30th rose a smaller-than-expected 75 percent from a year earlier to $23.6 million.

The company reported pro forma income of $801,000, or 4 cents per share, compared with a loss of $174,000, or one cent, in the prior year, and well below the 18 cents per share expected by analysts.

Latest quarter results included $3.1 million in charges, $1.1 million to cover discontinued products, and $1.9 million for money owed by a single customer.

“We did not achieve our goals,” said president and chief executive officer Alan Lefkof. “The external financing environment for service providers was the key factor contributing to a revenue shortfall.”

Lefkof said the current quarter will likely produce “sequentially flat” revenue and “approximately breakeven pro forma results.” Still, Lefkof expects that “service providers will improve their DSL provisioning in 2001, and as a result, Netopia’s annual revenue for FY 2001 should grow in the range of 50 percent.”

Richard Juarez, e-commerce infrastructure analyst at Robertson Stephens, slashed his estimate for Netopia’s 2001 per-share earnings to 11 cents from 79 cents. Though he continues to rate the stock a buy, Juarez called the results “disappointing.”

Juarez said things might pick up for Netopia in the future, in light of “the inherent value of the company’s technology assets, fully funded status, expected positive cash flow in the first quarter of fiscal 2001, valuation, and pent-up demand for DSL and other broadband solutions.”

Pacific Crest, Kaufman Brothers and W.R. Hambrecht were among firms said to have downgraded Netopia following the results.

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