Prodigy losses climb

Prodigy Communications beat analysts' estimates in its fourth quarter but saw its losses more than double from a year earlier.

Shares of the Internet service provider closed Monday's session down $0.06, or 2 percent, to $2.94, well off its 52-week high of $22. Prodigy (Nasdaq: PRGY) managed to top analysts' estimates in the previous quarter.

Prodigy competes in a tough ISP market as a slew of rivals battle for the No. 2 spot behind America Online. Prodigy dukes it out with EarthLink (Nasdaq: ELNK) and free ISPs such as NetZero (Nasdaq: NZRO).

For the quarter ended Dec. 31, 2000, the company reported a net loss of $72.9 million, or $1.04 per share, from $29.8 million, or 46 cents a share, in the fourth quarter of 1999. First Call analysts' consensus figure called for a loss of $1.48 a share.

Quarterly revenue rose to $91.3 million from $56.2 million a year earlier.

The Austin, Texas-based company said its subscriber base grew sequentially to 2.8 million from 2.7 million in the third quarter. Prodigy recently revised its strategic and marketing pacts with major shareholder SBC Communications (NYSE: SBC), which boosted its financial outlook.

As for its guidance, company officials were confident that Prodigy would meet its first-quarter estimates. First Call estimates expect a loss of 79 cents a share for the period.

For the full year 2001, the company expects to post a net loss of $317 million to $325 million, before adjusting for SBC's stake. Much of the loss may be attributed to amortization expenses related to SBC's investment in the company, Prodigy officials said.

Total revenue for the year is pegged between $350 million and $365 million, with earnings before interest, taxes, depreciation and amortization of $31 million to $34 million. The company also expects to have between 3.1 million to 3.7 million subscribers by the end of the year.

For fiscal 2000, Prodigy saw total revenue rise to $376.4 million, from $173.4 million a year earlier. The company reported a net loss of $209.6 million, or $3.10 a share, up from a net loss of $80.5 million, or $1.34 per share, in fiscal 1999. However, the full-year figure was narrower than First Call's projected loss of $3.74 a share.

Operating loss for the 12-month period was $315.8 million, compared with $88.2 million in the prior year.