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Earnings roundup: WinStar beats, CheckFree meets estimates

Growing Internet-related business in the second quarter helped WinStar Communications Inc. (Nasdaq: WCII) boost revenues and post narrower-than-expected losses.

In second quarter results released after market close Tuesday, the provider of wireless communications for business reported a net loss of $175 million, or $3.53 cents a share. Analyst consensus predicted a loss of $3.74 a share for the quarter ended June 30.

Second quarter revenue rose 72 percent year-over-year, to $97 million from $56 million. Internet connections made up more than 48 percent of WinStar's 69,000 lines installed in the seonc quarter. About 27 percent of WinStar's 453,000 lines are devoted to Internet access.

Overall gross margin and average monthly revenue per customer improved as WinStar sold more bundles of data services, the company said.

Shares of WinStar fell 1 3/4 to 46 in regular trading prior to Tuesday's report. Of 15 analysts polled by Zack's Investment Research, eight have the equivalent of "moderate buy" ratings on WinStar, and seven recommend the stock as a "strong buy".

Other companies reporting quarterly results:

  • CheckFree Holdings Corp.
  • (Nasdaq: CKFR)

    The electronic payment specialist earned about as much as analysts predicted in the fourth quarter, but told Wall Street to expect losses in the current period.

    CheckFree saw fiscal fourth quarter net income of $2.8 million, or 5 cents per share, not including one-time events. That was in line with the consensus estimate of 13 analysts surveyed by First Call.

    But First Call had also predicted a break-even quarter for the fiscal first quarter, which ends September. CheckFree on Tuesday told analysts to expect a loss ranging between 8 and 10 cents a share, on revenue of $65 million to $70 million.

    Fourth quarter revenue rose to $70.8 million from $63.5 million in the year-ago period, when CheckFree earned 3 cents per share. The company's subscriber base grew 6 percent to almost 3 million at the end of fiscal 1999, compared to 2.4 million a year earlier. Internet-based user growth was better than 20 percent.

    "These results are directly on our expectations," said Pete Kight, chairman and CEO. "While our financial performance was solid, I am even more pleased with how we extended our leadership in non-financial metrics, such as subscribers, signed biller contracts, bills distributed on the Internet, live distribution sites on the Internet, and improvements in electronic processing efficiency."

    CheckFree's e-commerce unit posted revenue growth of 20 percent year-over-year, to $46.5 million in the fourth quarter. That division saw an operating profit of $1.3 million, after accounting for a service disruptionin April.

    Investment services saw operating income of $2.9 million on revenue of $12.3 million. Software revenues rose 5 percent to $11.9 million from $11.3 million a year ago.

  • Skymall Inc.
  • (Nasdaq: SKYM)

    The airline catalog retailer saw its Internet-related revenues rise seven-fold in the second quarter even as losses piled up as the company spent more on e-commerce.

    Skymall lost $5.2 million, or 58 cents a share. The lone analyst cited in First Call's survey of earnings predicted a loss of 38 cents a share for the quarter ended June 30.

    Sales from increased to $2.3 million from $335,000, the company said. The website generated 16.6 percent of Skymall's overall second quarter revenue of $13 million, compared to 3.3 percent of $10.1 million total in the year ago period.

    General and administrative costs shot up to $9.8 million from $2 million in last year's second quarter, as Skymall boosted its e-commerce offerings. Online commerce-related spending included $2.4 million for personnel amd technology. Marketing and infrastructure spending rose $1.6 million. Skymall also spent $2.7 million to settle a class action lawsuit related to its sales tax collections.>