Aether Systems (AETH) sees $25 million in Q3 revenues, representing a 22% decline from the prior quarter. JP Morgan downgraded its opinion on the shares to market perform from buy.
Analyst Paul Coster told S&P MarketScope he downgraded the rating based on the company's guidance. He thinks a prolonged period of uncertainty surrounds the future of the company due to its high cash burn rate and a lack of evidence its business mix will deliver sustainable gross margins needed to drive Aether to overall profitability. While Coster does think the company's Fusion platform is the best available platform for large scale enterprise, he sees no likelihood of high-margin software licenses ramping up significantly from platform sales in the next three to four quarters. Coster widened his $4.25 2001 loss per share estimate to $4.35 and his $2.23 loss forecast for 2002 to $2.65.