Losses surge at Aether despite soaring revenue

Expenses increasing as company expands

Earnings

July 25, 2000|By Mark Guidera | Mark Guidera,SUN STAFF

Aether Systems Inc., the fast-growing wireless applications services company in Owings Mills, reported after the stock market closed yesterday that second-quarter revenue and losses soared as the company pursued an aggressive growth strategy aimed at taking the dominant spot in an emerging industry.

For the quarter, which ended June 30, Aether said it booked a net loss of $90 million, or $2.36 cents a share, on revenue of $10 million.

For the corresponding quarter last year, the company reported a net loss of $2.9 million, or 15 cents a share, on $443,000 in revenue.

Aether attributed the climb in revenue to growing subscriptions for its mobile wireless application hosting services, engineering consulting services and software product licenses.

Subscriptions jumped to $6.7 million in the quarter, compared with $331,000 in the corresponding three months last year.

Higher losses were attributed to increased operating expenses as the company expands rapidly and invests heavily in networking equipment and partnerships.

David Oros, Aether's chief executive officer, said the quarter's performance validates Aether's business plan "and the aggressive nature by which the company is pursuing its strategy."

"Quick, thoughtful execution is the key to success in this burgeoning industry," he said.

"Aether is working diligently to win customers and generate revenue as it extends its leadership position."

Oros predicted that the market for wireless data service will grow significantly within the next 12 to 24 months, and said Aether is moving aggressively to build its infrastructure and hire top technology talent to attain a dominant position in the industry.

The company moved at a torrid pace in the quarter, striking deals to buy and expand a competitor in Europe, and signing partnership or service deals with a number of companies including Microsoft Corp., Charles Schwab & Co. and Data Critical Corp.

For the first six months of the year, Aether reported a net loss of $123 million, or $3.65 a share, on revenue of $16 million. For the first half of last year, the company reported a $4.3 million net loss, or 22 cents a share, on $787,000 in revenue.

The company said executives planned to discuss the company's performance in detail in a conference call today with investors and analysts.

Shares in Aether fell $14.125, or 8 percent, yesterday to $168.875.

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