LOWER-PRICE NET SERVICE FIRM REBOUNDS.

Byline: Gregory J. Wilcox Staff Writer

WESTLAKE VILLAGE - Shares of Internet service provider United Online Inc. jumped nearly 8 percent Wednesday after an analyst upgraded his recommendation on the eve of the company's earnings release.

The Westlake Village-based company's stock closed at $15.34, up $1.11 or 7.8 percent, on heavy volume of 1.4 million shares. That's nearly twice the average daily volume of 806,600 shares.

The run-up came after analyst Youseff Squali at First Albany Corp. in New York City elevated his rating on the stock to ``strong buy'' from ``buy.'' He also increased his target price for the stock to $21 from $19.

United Online, which offers value-priced Internet access through its NetZero, Juno and BlueLight Internet brands, is scheduled to report second quarter fiscal 2003 results today.

The company is expected to beat the 17 cents per share consensus of four analysts polled by Thomson Financial/First Call.

Squali, in his research report, wrote that he expects United Online to report a strong quarter today and issue an enhanced forecast for the year.

``We remain very enthusiastic about (the company's) outlook and growing momentum,'' he wrote.

He expects revenue to increase 35 percent - to $264 million - for the fiscal year that will end June 30. Full-year earnings per share should be 83 cents, compared with a loss of 65 cents the previous year.

This is quite a turnaround for a company severely pummeled during the dot-com implosion of the late 1990s.

The company began as a free service provider that relied on advertising for revenue. Some free service is still available, but un major players like Earthlink, AOL and MSN.

Ned P. Zacher, an analyst at Thomas Weisel Partners in New York, gives management high marks for the company's improved performance.

And United Online is finally finding its way in the marketplace.

``They have discovered a sustainable business model, and they are executing well,'' he said.

United Online officials could not be reached for comment.