Loss Narrows at EarthLink - TheStreet

Loss Narrows at EarthLink

The company beats on a pro forma basis but lowers second-half revenue guidance.
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Internet service provider



posted a narrowed loss on higher revenue and solid subscriber additions, and beat earnings estimates on a pro forma basis, but was trading down in premarket action after lowering its revenue forecast for the rest of the year.

Atlanta-based EarthLink lost $14.5 million, or 10 cents a share, in the latest quarter compared with $34.9 million, or 27 cents a share, last year. On a pro forma basis, EarthLink's earnings before acquisition-related amortization and accretion dividends were $11.4 million, or 7 cents a share, compared with $10.8 million, or 7 cents a share, last year. Analysts were forecasting earnings of 3 cents a share on that basis.

Revenue rose 5% to $352.3 million. The company ended the second quarter with about 5.04 million paying subscribers, up 180,000, or 3.7%, from a year ago. The company added 102,000 broadband subscribers during the quarter, a gain of about 64.4%, while overall narrowband subscribers declined 4.9% from a year ago to about 3.9 million.

The company expects third-quarter revenue of $350 million and full-year revenue of $1.4 billion. Analysts were forecasting $362 million in the quarter and $1.45 billion in the year, according to Thomson First Call. It expects to lose $86 million to $100 million for the full year.

EarthLink expects earnings before interest, taxes, depreciation and amortization to be $25 million to $31 million in the third quarter, and expects to add 230,000 to 280,000 net broadband subscribers for the year. The company also expects to end the year with about 5.0 million to 5.15 million total paying subscribers.

The shares were down 8 cents, or 1.1%, to $7.25 on Instinet.