Excite@Home posts loss, needs more funding

Internet service provider Excite@Home reported a steep second-quarter loss yesterday and warned investors it needs additional funding to make it through the end of 2001.

For the quarter, the company posted a $346.3 million second-quarter loss, or 85 cents per share, compared to a $668.3 million loss, or $1.69 per share, for the same period last year. Subscribers increased to 3.7 million at the end of the second quarter, an increase from 1.7 million one year ago.

Despite these improvements, Excite@Home Chairman and CEO Patti Hart said the company’s future appears conditional, noting the negative impact of the company’s fledgling and cash-draining media business “more than offset” better numbers in the consumer-access business.

“Our media operations will continue to lose money for the foreseeable future--losses that we cannot afford to absorb on an asset that is not of strategic value,” Hart said. “As a result of these losses, plus the continued deterioration of the general economic climate and other factors, we have determined that we will require additional cash resources prior to the year’s end.”

Last month, Excite@Home said it was funded beyond the end of the year after raising $185 million in June through contract renegotiations and convertible-note sales--more than twice the $75 million to $85 million it announced in April it required to stay afloat.

Hart said Excite@Home has “no intention of investing additional monies in narrowband revenue growth” and will focus on broadband growth, expanding its customer set, scaling its network and establishing cable-operator relationships.

“We are evolving our business model to better serve our cable customers needs and, at the same time, broaden our customer set beyond the cable industry,” she said. “We are focused on the right things and are gaining momentum in our core business.”