March 25, 2002 3:20 PM PST

Liberate narrowly beats estimates

Liberate Technologies, a developer of interactive television software, on Monday reported a narrower-than-expected loss for its fiscal third quarter.

The San Carlos, Calif.-based company reported a net loss of $66 million, or 62 cents per share, on revenue of $23.7 million. In the same quarter a year ago, the company had a loss of $70.4 million, or 68 cents per share, on revenue of $14 million.

The company said that excluding special charges for warrants, deferred stock compensation and restructuring costs, revenue was up 65 percent for the third quarter, ended Feb. 28, compared with the same period last year. On a pro forma basis, the company had a loss of $5 million, or 5 cents a share, on revenue of $24.6 million. For the same quarter a year ago, the company reported a loss of $8.9 million, or 9 cents per share, on revenue of $14.9 million.

Analysts had expected a loss of 7 cents per share.

Liberate has exceeded analysts' expectations for 11 quarters in a row. The company raised its yearly revenue forecast to between $89.2 million and $89.7 million.

"Our results reflect Liberate's continued success in delivering a launch pad to network operators for digital services," Mitchell Kertzman, Liberate's chief executive, said in a statement. "In a very challenging marketplace, our customers are looking for solutions that reduce their overall costs and increase their revenues per subscriber."

The company said that during the third quarter, cumulative deployments of its software platform increased by 400,000 to 2.8 million worldwide.

"We expect an acceleration of deployments later this year, but next year we expect them to really take off," Kertzman said in a phone interview.

Most of the deployments were in Europe, Kertzman said, but revenues from Europe and North America were balanced.

Liberate has cash and equivalents of $412.3 million compared to the last quarter when the company had $430.3 million.

The company anticipates that the cash burn rate for the fourth quarter, ending May 31, would be about $28 million. Revenues are expected to be in the $25 million to $25.5 million range.

Liberate reiterated that, excluding special charges, it expects to be profitable in the first half of its fiscal year 2003, which is from June 1 of this year to November 30.

In February of this year, the company laid off about 25 to 45 employees and now counts 531 people in its work force.

Liberate closed down about one percentage point, or 6 cents, at 6.26. In after hours trading the company was up almost 14 percent, or 87 cents, at 7.13.


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