Robbie Stephens Cuts Aether

Analyst thinks the wireless service provider's expenses will mount over the next two quarters

Robertson Stephens downgraded Aether Systems (AETH ) to long term attractive from buy. The wireless services provider posted a $0.90 per share Q4 loss vs. an $0.18 per share loss on Wednesday.

Analyst Marianne Wolk said the company's Q4 results beat estimates, but she downgraded her rating on the shares because she believes it's "hard to imagine" upside surprises to the company's $180 million 2001 revenue guidance. Wolk says an operational expenses build-up over the next two quarters will be difficult to reduce by mid-2002, and believes breakeven results are more likely in 2003 than in Aether's 2002 target.

However, she raised her $121 million 2001 revenue estimate to $145 million, and raised her $218 million 2002 revenue estimate to $230 million. Wolk says her estimates reflect Aether's ongoing momentum and its recent acquisitions of RTS and Motient. She sees a $4.60 2001 loss, and a $3.36 2002 loss.

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