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Excite meets Street
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October 24, 2000: 6:55 p.m. ET
Web-access company's subscriber growth strong, but sees wider 4Q loss
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NEW YORK (CNNfn) - Internet-access company Excite@Home posted on Tuesday a third-quarter loss that matched Wall Street expectations, amid strong growth in subscribers to its high-speed service.
But the company, which is in the throes of an aggressive expansion plan, also warned of a wider-than-expected fourth-quarter loss.
Redwood City, Calif.-based Excite@Home, a high-speed Internet-access provider that also develops Web content, reported a pro forma loss of $41.6 million, or 10 cents per share, compared with a loss of $4.2 million, or 1 cent per share, in the third quarter of 1999.
Analysts surveyed by First Call had expected Excite@Home (ATHM: Research, Estimates) to report a loss of 10 cents a share. Revenue grew to $169.9 million from $112.6 million, a 51 percent jump from the previous year and up 8 percent from $157.6 million in the second quarter.
 Pro forma loss for the quarter excludes net expenses of $626.8 million for the amortization of goodwill and other intangible assets, as well as the cost and amortization of distribution agreements and certain non-operational and other expenses.
The company, the largest provider of links to the Internet via cable modems, said its residential broadband subscriber base grew to more than 2.3 million, up 28 percent from about 1.8 million at the end of the second quarter in June, and was up 174 percent from a year ago.
In a statement, Excite@Home Chairman and Chief Executive George Bell said, "We are observing unprecedented levels of interest in and awareness of broadband services, and we are moving aggressively to capitalize on these trends. Our network build-out and our cable partners' plant upgrades have made excellent progress, as more than half of our North American cable footprint is now upgraded and marketable."
In September, George Bell said he plans to resign as head of the high-speed Internet-access firm once a suitable replacement is found, but he will stay on as chairman until at least the end of 2001.
AT&T (T: Research, Estimates) owns 25 percent of Excite@Home and has a 74 percent voting stake.
Media traffic for the company's Web-content segment, the Excite Network, averaged 149 million daily page views in September, an increase of 9 percent from 137 million in June 2000 and up 67 percent from 89 million in September 1999, the company said. In September the Excite Network reached 27 million unique visitors, or 35 percent of U.S. Web users, according to Media Metrix.
Looking ahead, Excite@Home said it expects its broadband subscriber base to grow in the fourth quarter by 25 to 30 percent.
In April, Excite@Home set a goal to reach at least 3 million residential broadband subscribers by the end of 2000, six million subscribers by the end of 2001 and 10 million subscribers by the end of 2002.
Bell remains optimistic about the plan, which, while costly in the near term, could boost annual revenue to $2 billion by 2002, the company has projected.
"We are exactly where we want to be in terms of broadband customers," he said on a conference call with analysts. "It took us 48 months to sign up our first million, and only eight months to get our second million. Our third will come faster than that."
 The company further indicated that it anticipates revenue growth at a low-double-digit rate in the fourth quarter compared with the third quarter, and that it expects its loss per share before special items to fall in a range of 8 cents to 10 cents.
Before the announcement, analysts had expected the company to report a fourth-quarter loss of 6 cents a share, according to First Call.
The results were released after the close of the regular trading session. Shares of Excite@Home closed at $10.12, up 6 cents from Monday's close. After the closing bell, the shares popped higher to $11 a share, but eased back to about $10.18. 
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Excite@home
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