NEW YORK-American Tower Corp., Boston, warned June 21 of greater losses than securities analysts had expected due to acquisition integration problems and a write-off related to the Nasdaq delisting threat against a company in which it invested.
The wireless and broadcast tower owner and operator expects to post losses ranging from 52 to 58 cents per share for the second quarter, 42 to 52 cents for the third quarter, 43 to 54 cents for the fourth quarter and $1.77 to $2.03 for the full year.
By comparison, a Thomson Financial/First Call poll of securities analysts offered a consensus outlook of losses of 41 cents per share for the second quarter, 39 cents for the third quarter, 40 cents for the fourth quarter and $1.56 for the year.
“We now believe it is likely we will record an impairment charge on our investment in U.S. Wireless Corp. in the second quarter. The current book value of our investment is approximately $23 million … While our ownership in U.S. Wireless is in the form of preferred stock and we are the only preferred shareholder, U.S. Wireless’ public common equity valuation has dropped significantly,” Steve Dodge, chairman and chief executive officer, said in a prepared statement.
The Nasdaq National Market halted trading of U.S. Wireless Stock May 29 and threatened to delist the company following a series of findings that call into question the integrity of its founder and now former chief executive officer, Dr. Oliver Hilsenrath.
“We continue to believe the technology which U.S. Wireless has developed and owns for both E-911 and telematics applications is well-positioned to benefit from future deployments based on requirements for E-911 and demand for location-based wireless services,” Dodge said.
American Tower also cited “certain challenges” that Verestar, its teleport and network services subsidiary, has had “assimilating its InterPacket and USEI acquisitions.” In addition, problems with hardware supplied to InterPacket by an outside vendor have disrupted customer service.
Verestar also has experienced slackened revenues due to “slowing demand in specific business segments and geographies,” and it “instituted tighter credit and collection polices in May which have impacted on revenue projections for the year,” American Tower said.
American Tower said it expects its Verestar subsidiary to return to positive cash flow status by the third quarter.
