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Vonage Growth Slows

Losses narrow, but user gains disappoint some watchers.

Vonage

(VG) - Get Vonage Holdings Corp. Report

trimmed losses in the third quarter, but increased customer defections cut into growth.

The Holmdel, N.J., Internet calling shop posted an adjusted net loss of $62 million, or 40 cents a share, in the quarter ended last month.

Those numbers compare with a pro forma loss of $74 million, or $1.16 a share, in the second quarter. Vonage lost $66 million in the quarter last year.

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Analysts were looking for an adjusted loss of 44 cents a share in the third quarter, according to Reuters Research.

Total sales for the period were $161 million, up from $143 million in the second quarter and more than double the $74 million a year ago.

Vonage added 204,591 net new subscribers in the third quarter, taking its total to 2,057,844.

But the monthly rate of customer cancellations, or churn, increased to 2.6%, up from 2.3% in the prior quarter and a year ago.

Looking ahead, the company expects to end the year with somewhere between 2.2 million and 2.3 million subscribers. That outlook for subscriber growth is weaker than some investors expected.

Vonage shares fell 7 cents to $7.38 in early trading Tuesday.