Next Level warns of 4Q shortfall, lowers 2001 outlook

Next Level Communications warned Thursday that it will post a wider-than-expected loss in its fourth quarter and cut its expectations for fiscal 2001 because of lower sales to Qwest Communications and sluggish customer development in Korea.

Next Level (Nasdaq: NXTV) shares closed off 13 cents to $10.81 ahead of the warning but fell to $6.44 in after-hours trading.

Company officials said it now expects to post a loss of 22 cents a share in its fourth quarter on sales of $31 million. That doesn’t include a $9 million to $10 million inventory charge it will take in the quarter.

First Call Corp. consensus expected Next Level to lose only 12 cents a share in the quarter on sales of $54.5 million.

The pain doesn’t end there.

The maker of equipment that turns traditional telephone lines into high-speed pipes able to transmit television, data and voice services will record a loss of about 72 cents a share in fiscal 2000 on sales of only $150 million.

Analysts were expecting a loss of only 63 cents a share.

Company officials said it still expects sequential quarterly sales growth in 2001 but total sales will fall below analysts’ estimates.

“Next Level continues to have strong fundamentals and we remain confident that we are well positioned to be a valued leader in full-service broadband systems,” said CEO J. Michael Norris in a prepared release. “However, this progress was offset during the fourth quarter by reduced revenue from Qwest and slower than anticipated customer development in Korea.”

Last quarter, Next Level posted a loss of $10.4 million, or 12 cents a share, on sales of $48.3 million.

The stock stormed up to a 52-week high of $202 in March before falling to a low of $8.44 in December.

Four of the six analysts tracking the stock rate it either a “buy” or “strong buy.”