Aether narrows its loss to 46 cents a share in quarter

Founder sees turning point

shares climb after hours

August 08, 2002|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Aether Systems Inc., the Owings Mills wireless communications company, reported yesterday that its losses shrank by tens of millions of dollars in the second quarter, even as revenue went down slightly.

The net loss in the quarter was $19.5 million, or 46 cents a share, which included a $22 million gain for the early retirement of debt. The net loss in last year's second quarter was $103.6 million, or $2.55 a share.

After restructuring and other noncash charges, Aether posted an operating loss of $25.7 million, or 61 cents a share, for the quarter that ended June 30.

Revenue declined to $31.6 million from $32.1 million in last year's quarter.

The numbers were released after the market closed yesterday. Shares lost 3 cents to $3.05 during regular trading, then jumped to $3.44 after hours.

David S. Oros, Aether's founder and chief executive officer, said the second-quarter results were a good turning point for the company and he expects the business to see significant improvements over the next three quarters.

"We're happy with it," he said. "We've pretty much beat everyone's expectations of what we're supposed to do. We're still marching to become a profitable company, and that's our goal."

Aether's operating loss of 61 cents a share was smaller than the loss of 75 cents a share predicted by Wedbush Morgan Securities in Los Angeles.

Scott P. Sutherland, an analyst with Wedbush Morgan, said Aether did a good job watching expenses but hasn't proved that it can cut costs to the point of having a profitable business model. "It's going the right direction, but it's not nearly close to profitability," Sutherland said.

Aether executives said the losses narrowed because the company has been managing costs and cutting inefficiencies out of the businesses it has acquired.

"We are seeing revenue growth quarter over quarter, where other companies are not, in our business," said Aether's chief financial officer, David Reymann. "So we're very proud of that because we've been able to do that while cutting costs."

Aether's operating expenses - which include research and development, as well as marketing and administrative costs - decreased to $31.4 million from $62.9 million a year earlier.

The company said it expects this quarter's revenue to be higher than in the second quarter. Operating expenses, which the company previously said it expected to be in the high $20 million range, are now expected to be in the mid- to high $20 million range.

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