ITXC Beats Analysts' Estimates Again

ITXC Corp. on Tuesday provided the latest evidence that online voice services could be the next big thing by beating analysts' estimates for the fourth consecutive quarter since going public in September. For the quarter ended June 30, ITXC reported a loss of $5.8 million, or 15 cents a share, on revenue of $18.6 million. That compares with a loss of $4.7 million, 16 cents a share, on revenue of $4.6 million for the previous quarter. The per-share loss was 5 cents better than analysts' predictions of 20 cents per share.

ITXC, which provides phone-to-phone and Web-to-phone services over the Internet, followed up the good news by reaching an agreement today to acquire eFusion Inc., a maker of voice-enabled applications.

Brian Boyer, VP of First Analysis, was encouraged by ITXC's less-than-expected losses and maintained his estimate that ITXC would post its first profitable quarter by mid-2002. "The numbers were great from both a traffic standpoint and an earnings standpoint," Boyer says. "They really shot the lights out."

John Bain, an analyst with Hoak Breedlove Wesneski & Co. who is enthusiastic about the voice-over-Internet market, was impressed with the fact that voice traffic, which he had predicted would grow 40%, actually shot up 53%. But Bain was mildly disappointed with a 19% drop in ITXC's average rate per minute to 9.3 cents from 11.5 cents during the previous quarter. "I would guess they were using price as a tool to generate extra revenue," he says.

ITXC CEO Tom Evslin says the company plans for rates to drop 10% each quarter, but the ramping up of its Web-to-phone service, which was introduced last quarter and typically is used on cheaper calling routes, resulted in a larger-than-expected drop. Average rates per minute for the company's more established phone-to-phone service dropped 8%.

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