AP News

Earthlink boosts full-year forecast


ATLANTA (AP) — Earthlink Inc.'s third-quarter profit fell sharply but the company boosted its full-year outlook as it made progress in shifting its focus toward information technology services.

The company, based in Atlanta, was once known as an Internet service provider but struggled with intense competition from higher-speed providers. It has made several acquisitions to help broaden its business services and is trying to become an information technology company with data centers and cloud computing services that it hopes will prove more profitable.

Earthlink reported Tuesday that it earned $1.4 million, or 1 cent per share, for the quarter that ended Sept. 30. That is compared with $7.5 million, or 7 cents per share, earned in the third quarter of last year. Its total revenue fell 6 percent to $334.8 million from $357.3 million.

The company also said it is investing $45 million in a nationwide data center and fiber network expansion.

As part of the expansion, Earthlink will make improvements to its data center in Rochester, N.Y. early next year. It also will add four new data centers in Chicago, Dallas, San Jose, Calif., and South Florida. Earthlink also said it plans to increase capacity on its network and add new network routes across the country.

The company also said that it said it plans to cut its debt to improve its financial position.

"This quarter was one of continued progress as we move closer to our goal of transforming EarthLink into a nationwide IT services business," said EarthLink Chairman and CEO Rolla Huff said in a statement.

Earthlink now expects net income of $3 million to $5 million for the full 2012 fiscal year versus its prior forecast of a loss of $1 million to $4 million.


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