RealTime IT News

Northpoint Quick To Offset Investor Estimates

Bad news from the investment community hasn't stopped Northpoint Communications Inc., from continued expansion of its digital subscriber line deployment and marketing efforts.

In a research report released Monday from investment firm Stephens Inc., telecommunications analyst Charles Pluckhahn increased his estimate of Northpoint's share loss from $3.29 to $3.47.

"We have shortened our assumptions for the depreciable life of the company's fixed assets to better reflect the components of its network," Pluckhahn said. "We have also doubled our expectations for minority interest from $3 million to $6 million per quarter to account for the rapid growth in Canadian and European ventures."

However, Pluckhahn did raise his expectations for third quarter revenues from $26 million to $30 million and line deployment from 83,000 to 87,000, as the Verizon strike didn't have the effect on DSL deployment as originally expected.

Pluckhahn added the caveat that Verizon's buyout of Northpoint wasn't considered in his estimates for fiscal year 2001.

Hoping to offset Monday's news, Northpoint quickly announced Tuesday further DSL expansion on the East Coast to Albany, NY, Harrisburg, PA, Richmond, VA and Sarasota, FL.

Shellye Archambeau, Northpoint chief marketing officer, said the announcement is part of her company's strategy to become the largest provider of business and residential DSL services.

"Northpoint's mission is to extend the benefits of broadband to more American homes and businesses than any other service provider," Archambeau said. "We are pleased to offer high-sepeed Internet access to more customers in the Eastern part of the United States as we continue to build on the nation's largest DSL-based broadband network."

As part of its expansion strategy, Northpoint has made its mark by partnering with carriers, as in the case with Call-Net in Canada and Versatel in Europe.

In the partnering tradition, Northpoint also announced its partnership with theglobe.com, one of Media Metrix Top 500 sites, to market its broadband services on various locations throughout the site. Four of theglobe.com's more popular Web pages will sport links to sign up for Northpoint's DSL service; the registration page, uPublish Web publishing tool, small business resource center and Happy Puppy.

A spokesperson with theglobe.com said the deal was likely struck on a revenue-sharing basis, with the Web site getting a certain amount for every referral to Northpoint.

"Northpoint's services compliment theglobe.com's community environment by offering a faster way for our users to communicate and interact online," said Ira Silberstein, theglobe.com's director of business development. "As online usage continues to proliferate, accessibility and high-speed Internet connections are becoming necessary tools for the mainstream user.

Northpoint's efforts paid off as, after an initial drop, its stock rallied Tuesday to finish at 6.938, up 1/8 on the day.