@Home Network on Wednesday reported a second-quarter loss that was more than what Wall Street expected, but the company blamed the loss on the cost of deals designed to increase distribution of its high-speed Internet services.
After the market closed, the cable-modem Internet access provider said it had a net loss of US$11.1 million, or 10 cents a share, compared with a loss of $11.9 million in the same quarter last year. Per share figures were not available.
Analysts had expected the Redwood City, California, company to report a loss of 7 cents per share, according to a recent analyst survey by Zachs Investment Research.
Revenue for the quarter ended 30 June increased more than ninefold to $9.2 million from $1 million last year. The number of subscribers surged to 147,000, 63 percent higher than at the end of March.
@Home provides access to the Internet through cable-TV wire. Its cable modems deliver information to customers' PCs about 10 times faster than conventional telephone modems. Wall Street watches @Home's results closely because it has the backing of several technology pillars, such as Tele-Communications Inc.
The 3-year-old company has yet to report a profit despite its aggressive efforts to sign up new customers. @Home said this quarter's wider-than-expected loss was because of new distribution deals signed with 10 cable affiliates during the quarter. The new affiliates will help @Home (ATHM) reach 10 million more potential customers worldwide.
"The company's revenue growth and subscriber numbers are on target," said Ted Hendersen, an analyst with investment firm Janco Partners in Denver. "The firm lost a couple of cents more than people expected, but in return, gained access to 10 million more (potential) customers."
During the quarter, the firm expanded its @Home service into five new markets, bringing to 31 the total markets served in the United States and Canada. @Home's service is now available to about 60 million homes worldwide.
Analysts say the company is well positioned as the premier brand in the emerging cable-based Internet access market. That position would be bolstered by AT&T's (T) proposed acquisition of TCI (TCOMA), one of @Home's main investors.
AT&T's planned upgrade of TCI's network would increase the number of homes with access to advanced digital cable systems capable of two-way data traffic, the kind of system required for @Home's Internet services.
As of 30 June, the number of homes with access to two-way upgraded cable networks was 7.9 million, a 28-percent increase over the 5.7 million homes passed by two-way upgraded cable at the end of the first quarter.
