Intelidata Technologies Corp. has some explaining to do.

Investors want to know why the company, a provider of telecommunications services and electronic commerce software, did not give advance warning of a second-quarter loss of $2.8 million, or 9 cents per share. Intelidata's management had previously said it was comfortable with earnings projections of about 4 cents per share for the quarter.

In a conference call with Intelidata president and chief executive officer John C. Backus late last week, investors made no secret of their disappointment.

"People thought they were gaining a little of their credibility, but this really sets them back," said Kevin J. Timmons, analyst at First Albany Corp.

Mr. Backus acknowledged the poor quarter but declined to address why the company did not give investors an indication of what to expect.

"There is no other way to categorize it but to say we had a lousy quarter," he said, adding that the division that sells consumer telecommunications devices was the "biggest disappointment."

Intelidata's stock price dropped $1.375 for the week and closed at $3.1875 Friday.

Mr. Timmons downgraded the stock to "neutral," from "buy," and reduced his revenue and earnings projections for the year.

Herndon, Va.-based Intelidata was formed in 1996 from a merger between U.S. Order, a screen phone and home banking software developer, and Colonial Data Technologies, a telephone and network services provider.

The earnings troubles came at a critical time. Analysts said Intelidata's future lies in the home banking and electronic commerce side of its business, but recently it has had to devote the bulk of its resources to fending off telecommunications competition.

Only about $1 million of its $16.9 million in revenues last quarter came from the electronic commerce business.

Intelidata officials said the company has been hurt by uncertainty surrounding Visa U.S.A.'s home banking unit, Visa Interactive, which spent months on the block and is in the process of being sold to the Integrion Financial Network.

The emergence of competing home banking technical standards also has hampered sales. Mr. Backus said many banks are reluctant to commit to home banking technology before a single standard begins to emerge.

Robert Borella, an Intelidata spokesman, said the company plans to have products ready in the fall for the Open Financial Exchange standard supported by Microsoft Corp., Checkfree Corp., and Intuit Inc.

When issuing his downgrading, Mr. Timmons said that Intelidata's earnings could have been much worse, if not for some unusual moves.

He said the company took back $1.2 million of the $1.6 million it had set aside as a charge for closing several facilities.

Mr. Timmons said Intelidata also gained about $1.9 million last quarter when part of its share in privately held Home Financial Network Inc. was sold. Before the sale, Intelidata owned 40% of Home Financial; it now owns 27%.

Without the funds from these moves, the company's second-quarter loss would have been more like 17 cents per share, Mr. Timmons said.

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