Excite@Home Inc. (Nasdaq: ATHM) met Wall Street estimates Tuesday with an operating loss of 2 cents a share in its second quarter and reported revenue above most Wall Street projections.
In results reported after the bell, Excite@Home reported a pro forma loss of $5.9 million, or 2 cents a share, on sales of $100.4 million. Merrill Lynch was expecting pro forma revenue at about $90 million and a loss of a penny a share.
The companies reported results as though Excite and At Home had been merged for a full quarter. The deal closed May 28. On an as reported basis, which counts Excite sales for the last month of the quarter, Excite@Home reported sales of $70.5 million.
Including a host of charges related to the merger, the company reported a net loss of $217.9 million, or a loss 76 of cents a share.
Prior to the earnings release, analysts said Excite@Home will need another quarter to show the full benefits of the merger. The second quarter was largely an integration period for the two companies.
"This quarter we focused on integrating the operations of both companies and delivering on the promise of providing a compelling Internet experience in both narrowband and broadband," said Tom Jermoluk, chairman and CEO of Excite@Home, in a statement.
Excite@Home said the plan is to use the narrowband Excite.com to generate leads for the company's high-speed services. The company estimates half of its sales leads for cable access came from Excite.com and targeted ads courtesy of the company's Matchlogic unit.
Excite@Home experienced an 11 percent response rate to e-mails targeted to Excite's registered users who also live in a cable footprint where the @Home service is available. The programs had a 5 percent conversion rate from qualified lead to subscriber.
For this quarter, analysts are viewing Excite@Home as two entities. Here's the breakdown:
Broadband services: As of June 30, @Home had 620,000 cable modem subscribers, an increase of 35 percent from 460,000 subscribers in March. The results were in line with Wall Street expectations. The base of homes with cables capable of @Home delivery jumped to 17 million on June 30 from 15 million in March.
The @Home service launched in 21 new markets, raising number of active domestic and international markets to 89.
The company's @Work service, which targets small businesses, reported 3,000 installed accounts in the quarter, up from 2,200 in the previous quarter.
Narrowband services (Excite.com's portal): Excite had 81 million page views per day in June, up from 77 million page views in March. The page view growth was a disappointment to many analysts. Merrill's Henry Blodget estimated Excite's page views to jump to at least 85 million.
Registered users for Excite came in at 38 million, up 36 percent during the quarter.
Analysts noted that Excite's traffic growth has been all organic as the company has avoided the great reach grab. Excite is hoping to get more registrations via new services such as Excite voice mail.
Excite@Home's Matchlogic unit increased its database of unique profiles to 65 million during the second quarter and doubled the number of targeted emails sent during the quarter to 40 million.