Markets & Finance

Thomas Weisel Downgrades United Online Rating

Thomas Weisel downgraded its investment recommendation on shares of United Online (UNTD) to peer perform from outperform.

Analyst Ned Zachar says he learned on June 24 that United is offering its $9.95-per-month basic and $14.95-per-month high-speed Internet access services for monthly rates of $6.95 and $9.95, respectively, to new customers only. Although Zachar doesn't expect the current trial to have an adverse effect on his second quarter estimates, he notes that the move may signal an increasingly competitive environment for value-priced dial-up services. The analyst notes United's model is highly sensitive to average revenue per user; for each 25-cent move in monthly average revenues, he thinks 2005 total revenues would be up or down approximately $11 million. While he is not changing his estimates yet, Zachar will be developing a more complete review of the economic impact of United's pricing actions.

The Good Business Issue

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

blog comments powered by Disqus