EarthLink Rises

A strong outlook boosts the stock.
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Shares of

EarthLink

(ELNK)

rose almost 6% after the Internet service provider posted better-than-expected results and gave a bullish outlook.

Net income fell 51% to $16.4 million, or 12 cents per share, compared with $33.3 million, or 22 cents, in the year-earlier period, the Atlanta-based company said. Revenue dropped 7.5% to $309.7 million. The results, which were hurt by rising expenses, beat analysts' forecasts that called for earnings of 8 cents and revenue of $311.2 million, according to Thomson Financial.

Shares of EarthLink, which has been picked in three cities in California, including San Francisco, to provide high-speed Internet access to residents, rose 53 cents, or 5.7%, to $9.79. They had dropped 17% this year before Thursday.

"Our traditional Internet access business is as robust as ever and continues to generate the cash needed to make the transition from ISP (Internet service provider) to total communications provider,'' says Chief Executive Garry Betty, in a statement. "Beyond our financial performance, we made great strides with our voice and municipal Wi-Fi initiatives during the quarter.''

Revenue in the current quarter is expected to be between $330 million and $335 million, with net income ranging from break-even to $5 million. Adjusted EBIDTA will be between $30 million and $35 million.

The company expects a loss as wide as $40 million. Sales will be between $1.33 billion and $1.38 billion.

Analysts had expected second-quarter earnings of 8 cents on sales of $309.5 million, according to Thomson Financial. EarthLink was expected to have a 4-cent loss for the year on sales of $1.56 billion.