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Liberate posts narrower-than-expected loss

The interactive TV software developer narrowly beats analyst expectations for its fiscal fourth quarter and reiterates its goal to reach profitability next year.

Liberate Technologies, an interactive TV software developer, on Thursday narrowly beat expectations for its fiscal fourth quarter.

Excluding special charges, the company lost $12.7 million, or 12 cents a share, on revenue of $16.1 million for the quarter that ended May 31. In the same quarter last year, the company lost $11.4 million, or 13 cents a share, on revenue of $9.1 million.

Analysts polled by First Call expected a loss of 13 cents a share.

Including charges, the company lost $79.5 million, or 76 cents a share. Last year, the company lost $37 million, or 41 cents a share, in the same quarter.

Mitchell Kertzman, Liberate's chief executive, was upbeat about the results.

"We continue to meet and exceed our business plan, as demonstrated by these outstanding results," Kertzman said in a statement. "The large year-over-year growth in license and royalty revenues illustrates the leverage our business model can generate as our customer deployments increase."

The San Carlos, Calif.-based company reported that its software was in use in more than 1.5 million set-top boxes as of May 31.

Liberate also reiterated that it expects to reach profitability during the second half of calendar year 2002.

During Liberate's fourth quarter, cable operators signed up about 400,000 subscribers for set-top boxes with its software.

The company previously estimated that by the end of the calendar year, 2 million set-top boxes would be using its software.

"If the trend continues, 2 million will be a very, very low estimate," David Limp, Liberate's executive vice president, said during a conference call.

During its fourth quarter, Liberate signed up Charter Communications, the fourth-largest cable operator in the United States, and Broadband Solutions, which plans to bring digital interactive services to television sets across Korea. The Broadband Solutions deal for the Korean market has the potential to reach about 8 million subscribers, Kertzman said during the call.

Liberate has cash, cash equivalents and investments totaling $451 million. During its fourth quarter, Liberate used up about $18 million. It expects to burn through $24 million to $26 million in the current quarter, its fiscal first quarter for 2002.

The company expects revenue between $16.2 million and $16.7 million and a loss of 12 cents to 13 cents per share in its first quarter.

Kertzman is a member of the board of directors of CNET Networks, the publisher of