Liberate Slashes Guidance in Half

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Liberate Technologies stunned Wall Street analysts late Wednesday when it
said it expects to generate one-half the amount of revenue this quarter than it
had previously projected.

The interactive-TV-software vendor blamed the shortfall on
capital-expenditure cuts by U.S. MSOs and debt restructuring at its key European
customers -- NTL Inc., Telewest Communications plc and United Pan-European
Communications N.V.

Liberate said it now expects to generate $12 million to $14 million in pro
forma revenue for its fiscal first quarter, a huge drop from the $20 million to
$22 million it had projected earlier. It also expects its net loss to be in the
range of 12 cents to 19 cents per share, doubling previous guidance.

Liberate added that it will take a $2 million to $3 million restructuring
charge. But the company maintained that it will reach 'pro forma profitability'
during the second half of next year.

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