GoAmerica tops estimates

Updated 7 p.m. ET

GoAmerica posted a smaller-than-expected loss in its fourth quarter Monday, dropping $19.4 million, or 37 cents a share, on sales of $6.1 million.

First Call consensus expected the provider of wireless Internet and data services to lose 40 cents a share in the quarter.

GoAmerica (Nasdaq: GOAM) shares closed up 81 cents, or 20 percent, to $4.88 ahead of the earnings report before moving up to $4.94 in after-hours trading.

The $6.1 million in sales represents a 389 percent improvement from the year-ago quarter when it lost $15.7 million, or 66 cents a share, on sales of $1.2 million.

GoAmerica exited the quarter with 47,632 subscribers, up 712 percent from the year-ago period when it serviced 5,869 subscribers.

More impressive, subscriber sales improved 57 percent from the prior quarter.

Recurring sales improved 44 percent from the third quarter to $4.1 million.

During a conference call with analysts, Chief Executive Officer Aaron Dobrinsky said the company still expects to reach profitability, on an EBITDA basis (earnings before interest, taxes, depreciation and amortization) by the second half of fiscal 2002.

In the fourth quarter, GoAmerica lost $17 million on an EBITDA basis, down from a loss of $17.4 million in the year-ago quarter.

"This was a fantastic quarter for GoAmerica," Dobrinsky said. "In the quarter, we added more than 17,200 new subscribers. That's up 57 percent sequentially."

Dobrinsky said GoAmerica will grow its subscriber base to between 68,000 and 70,000 in the first quarter and more than 300,000 subscribers by year's end.

The company exited the quarter with $114 million in cash.

"We're gaining traction through our key partnerships" with the likes of Siebel Systems (Nasdaq: SEBL), Oracle (Nasdaq: ORCL) and Dell (Nasdaq: DELL)," Chief Financial Officer Frank Elenio said during the conference call. "We anticipate our channel and partnership sales will continue to ramp later this year. Eventually a majority of our sales will be made through these partners."

Gross profit margins for all services improved to 15.5 percent from 10.7 percent in the third quarter.

Elenio said gross profit margins for subscription sales will check in at between 31 percent and 33 percent in the first quarter before moving up to around 40 percent by year's end.

Last quarter, GoAmerica lost $18.4 million, or 56 cents a share, on sales of $4.3 million.

The stock moved as high as $19.31 in January before falling to a low of $3.88 earlier this month.

All five analysts following the stock rate it either a "buy" or "strong buy."