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XO Reports Fourth Quarter Growth, Reduces Yearly Losses

XO Holdings Inc. boosted revenue and narrowed losses during the fourth quarter of 2006, mainly due to demand for its data and IP services. The company also improved its yearly losses from 2005.

The parent company of XO Communications LLC and Nextlink Wireless Inc. released its latest earnings numbers on March 16 after the stock markets had closed.

XO Holdings reported a $4 million quarterly increase in revenue over the fourth quarter of 2005, bringing in $355.3 million as compared to $351.3 million a year earlier.

At the same time, the companys quarterly losses went down by $12.4 million, from $43.5 million in the final quarter of 2005 to $31.1 million in the last four months of 2006.

More importantly perhaps, XO Holdings Inc. reduced its losses in 2006 from the previous year. It reported consolidated net losses applicable to common shares of $143 million in 2006, compared to $159 million in 2005.

Its yearly revenue reached $1.41 billion, coming in just below 2005s overall revenue of $1.43 billion.

Last year was key for XO Holdings. It launched its wireless division, Nextlink Wireless, which deployed wireless broadband services in nine major markets. Further, XO Communications chose Nextlink Wireless as its alternative last-mile services provider, a partnership that let XO Communications reduce reliance on Bell networks. Nextlink started operating in mid-2006 and contributed $.3 million to XO Holdings 2006 revenue.

XO Communications brought in the remaining income. Executives attributed fourth quarter growth to adoption of the wireline providers data and IP services; they said revenue from those products grew 18 percent in the fourth quarter of 2006 as measured against the same period a year previously. XO Communications also expanded its Ethernet footprint and upgraded its business VoIP service, XOptions Flex. Indeed, XOptions Flex accounted for $12.6 million in revenue during the fourth quarter of 2006, compared to $3.5 million in the fourth quarter of 2005, according to XO Holdings.

We continue to invest in expanding our IP services portfolio to drive revenue growth with existing and new customers, said Tom Cady, president of XO Business Services. We are also very excited about our new VoIP and private networking solutions for 2007, including our recently launched MPLS IP-VPN service.

XO Holdings stock closed at $4.35 at the end of the trading week Friday night, down 10 cents from the previous days close.

Nextlink Wireless Inc. www.nextlink.com

XO Communications Inc. www.xo.com

XO Holdings Inc. www.xo.com


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