WorldGate Revises Street Guidance
By Steve Donohue -- Multichannel News, 5/8/2001 5:24:00 AM
WorldGate Communications Inc. reported a $2.5 million increase in first-quarter revenue, but the interactive-TV company cut previous revenue guidance for the year 'to reflect general delays in the rollout of interactive services to date,' according to a company statement.
The company also reported Friday that it had $33.8 million in cash on hand at the end of the quarter, a drop from $46.5 million at the end of the fourth quarter. But WorldGate wrote in the earnings announcement that it has enough cash to operate for another five quarters, and that it expects to reach cash-flow breakeven by mid-2002.
While UBS Warburg LLC analyst Tom Eagan issued a report that praised WorldGate's effort to reduce overhead (the company laid off 20 percent of its work force in April), he said he expects WorldGate to burn through $7.5 million in cash per quarter, 'indicating that the company will need to raise additional funding in the first half of 2002.'
WorldGate reported $4.1 million in first-quarter revenue, missing UBS Warburg estimates of $6 million. The company reported a 45-cent-per-share loss, bettering the firm's estimate of 59 cents per share.
Eagan maintained a buy rating on WorldGate, with a 12-month price target of $7.50 per share.
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