EarthLink loses money in 4th quarter
ATLANTA (AP) — EarthLink lost money in its fourth quarter as its income from operations declined. Revenue managed to beat analysts' expectations, but its 2013 revenue forecast came in below Wall Street's view.
Shares of EarthLink fell more than 10 percent in morning trading on Tuesday.
The Atlanta company was one of the best-known Internet service providers but struggled with intense competition from higher-speed providers like cable companies. It has made several acquisitions to help broaden its business services and is transitioning to an information technology company with data centers and cloud computing services that it hopes will prove more profitable.
For the three months ended Dec. 31, EarthLink Inc. lost $9 million. Its per-share results were break-even. That compares with a profit of $4.2 million, or 4 cents per share, a year ago.
Revenue fell 5 percent to $331.6 million from $350.2 million as its business services and consumer services divisions reported lower revenue.
The performance still managed to beat Wall Street's revenue estimate of $328.4 million.
Subscriber "churn," or turnover, in the consumer segment dropped to 2.3 percent from 2.6 percent a year earlier.
EarthLink's full-year net income fell to $7.5 million, or 7 cents per share, from $34.6 million, or 32 cents per share, in the prior year.
Annual revenue rose 3 percent to $1.35 billion from $1.31 billion.
For 2013, the company foresees a loss of $40 million to $45 million on revenue between $1.25 billion and $1.27 billion.
Analysts expect revenue of $1.28 billion.
EarthLink also said Tuesday that it wanted to refinance some debt so it could cut interest expenses.
Shares of EarthLink dropped 72 cents, or 10.4 percent, to $6.21 in afternoon trading. The stock has traded in a 52-week range of $5.94 to $8.59.