Winstar Communications got a couple upgrades Friday after beating Street estimates in its first quarter but the stock fell 2 3/4 to 40 5/8.
In the quarter, Winstar posted a loss of $176 million, or $2.06 a share, on sales of $162.8 million.
First Call Corp. consensus expected the broadband services firm to lose $2.39 a share in the quarter.
On Friday, Merrill Lynch boosted the stock to a near-term "buy" rating from near-term "accumulate." Prudential Securites upgraded it from an "accumulate" recommendation to a "strong buy."
The $162.8 million in sales represents an 85 percent improvement from the year-ago quarter when it lost $165 million, or $2.48 a share, on sales of $88 million.
In the quarter, the company achieved gross profit margins of 40.7 percent, up from 22.9 percent in the year-ago quarter and 35.4 percent in its fourth quarter.
"Strong revenue growth and sharply improving margins have enabled us to deliver impressive results not just today, but for several quarters now," said CEO William Rouhana, Jr. in a prepared release. "These financial measures are being driven by the emergence of a high capacity broadband network that is both increasingly available to customers, and increasingly enriched by services that set it apart."
Last quarter, Winstar posted a loss of $180.4 million, or $3.28 a share, on sales of $141.5 million.
The stock surged to a 52-week high of 66 1/2 in March after falling to a low of 24 in October.
Eighteen of the 19 analysts following the stock maintain either a "buy" or "strong buy" recommendation.
First Call analysts expect it to lose $9.54 a share in the fiscal year.