Earthlink Turns a Profit
Internet service provider
Earthlink
(ELNK)
swung to a first-quarter profit that beat expectations, and the company upped its full-year forecast.
The Atlanta, Ga.,-based company reported a first-quarter profit of $54.4 million, or 49 cents a share, compared with a loss of $30 million, or 24 cents a share, in the year-ago quarter. Results beat Wall Street's expectations for a profit of 33 cents a share.
Quarterly revenue, though, slipped to $263.1 million from $324.1 million a year earlier, a decrease of 18.8%. The Thomson First Call average estimate was for revenue of $265.1 million. Earthlink said it expected the decline in revenue after the company allowed its narrowband subscriber base to decline to a more sustainable customer level while generating significantly higher cash returns.
Earthlink also upped its full-year outlook. The company now expects net income in a range of $153 million to $163 million, which is in line with analysts' estimates. Earthlink also expects annual adjusted earnings before interest, taxes, depreciation and amortization (or EBITDA) to fall between $245 million and $260 million, compared with the Thomson First Call average estimate of $241.5 million.
Shares of Earthlink were rising by 35 cents, or 4.3%, to $8.47. Among other Internet-related telecom names,
Time Warner Cable
(TWC)
gained 0.4%,
AT&T
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was off 0.1%,
Verizon
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gained 0.2% and
Comcast
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was tacking on 0.1%.
Microsoft
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slipped 0.4%, while
Time Warner
(TWX)
rose 1.5%.
