UNITED ONLINE STOCK RISES ON PROFIT HOPES.Byline: Brent Hopkins Staff Writer WESTLAKE VILLAGE - Investor confidence in United Online Inc.'s anticipated profits and new network deals sent its stock to new levels on Monday. United, traded on the Nasdaq stock exchange, shot to a 52-week high to close at $9.60. After the Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. announced last week that its net loss would be no more than $9 million and its pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. before interest, taxes, depreciation and amortization would exceed previous guidance, the stock has energized, rising 6.3 percent on Monday alone. United Online, which arose from the combination of Juno Online Services Juno client software icon Juno is an Internet service provider based in the United States. It is a subsidiary of United Online, which also owns NetZero and Bluelight Internet Services. and NetZero, also announced a multimillion-dollar, three-year deal with Level 3 Communications
Level 3 Communications NASDAQ: LVLT is a communications and information services company headquartered in Broomfield, Colorado, USA. , a dial-up network (1) The switched telephone network regulated by government and administered by common carriers. Also called "plain old telephone system" (POTS) and "public switched telephone network" (PSTN). (2) A network that can be accessed remotely via analog modems or ISDN. provider. The Broomfield, Colo.-based Level 3 gives United a presence in hundreds of cities nationwide. The deal bodes well for United Online, said analyst Peter DeCaprio, a principal with investment bank Thomas Weisel Partners' Boston office. ``It will absolutely help them,'' he said. ``It's part of the whole thing we've seen for the last few years: cheaper service for telecom. This bolsters future profitability - they've gotten their arms around costs very well in the past, so this will be a good way to keep them down.'' By using a third party, United Online's chief strategy officer Jon Fetveit said, the company can shave costs and not have to take on a network that would need maintenance at great distances. ``We'll continue to use them throughout the country,'' he said. ``It's a fairly costly exercise to install hardware throughout the country, so these other companies can do that much more quickly and efficiently than we could.'' Level 3 dealt with both of United Online's predecessors prior to the September 2001 merger but never specifically with the combined entity. Paul Lonnegren, director of media relations for the network, termed the relationship ``significant.'' Although broadband, via cable modems and DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary , has gained prominence in recent years, Level 3 remains confident that dial-up retains a strong enough market share to warrant multiyear deals. ``It's still a very healthy market,'' Lonnegren said. ``We believe that it will continue to be robust for at least the next three to five years.'' United Online, which bills itself as the budget alternative to other online services, thinks that the lower-priced dial-up market can coexist with its faster broadband cousins. ``Dial has a lot of legs left in the market,'' Fetveit said. ``Since we're the value-priced segment, at less than half the price of AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. and MSN (1) (MicroSoft Network) A family of Internet-based services from Microsoft, which includes a search engine, e-mail (Hotmail), instant messaging (Windows Live Messaging) and a general-purpose portal with news, information and shopping (MSN Directory). , so while broadband might pick off the higher-priced users, we think we'll be able to hang on to the value customers.'' When broadband becomes available at bargain rates, United Online will likely expand in similar ways, he said, again relying on third parties to keep costs down and investors happy. ``We want to be the Southwest Airlines This article is about the American airline. For the former Japanese airline, see Japan Transocean Air. For the British airline, see Air Southwest. Southwest Airlines Co. of dial-up,'' he said. ``When the pricing of broadband comes our way, we'll outsource that too.'' |
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