tw telecom Revenue Grows, Profit Dips

By Craig Galbraith Comments
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tw telecom, the provider of managed services to enterprises, reported a year-over-year revenue jump in the second quarter.

Revenue was almost $390 million, up nearly 7 percent from the second quarter of 2012. Profit, however, was down from $19.3 million to $17.3 million. The Littleton, Colo.-based company said that reflected higher depreciation expense resulting from net-asset additions, offset by M-EBITDA growth and lower income tax expense.

Enterprise revenue rose 8.7 percent compared to the same period a year ago.

“Our second quarter results demonstrate our ability to continue to successfully grow revenue, deliver healthy margins and generate cash flow while investing in the business, executing our growth initiatives and delivering exceptional customer service," said Larissa Herda, tw telecom’s chairman, CEO and president. “We substantially increased our sales talent, launched new products and features and offered more innovative choices for enterprises that will further differentiate tw telecom in the marketplace. We have a comprehensive, balanced approach to win market share with numerous initiatives to increase our sales momentum and the trajectory of our revenue growth."

Breaking it down by product line, data and Internet services revenue was up almost 15 percent, driven by an increase in strategic Ethernet and VPN-based products and other services, the company said, partially offset by churn and repricing. Data and Internet revenue represents 54 percent of total revenue for the quarter compared to 50 percent a year ago.

Following the trend of many providers, voice-services revenue was down 2.3 percent. Voice comprised 24 percent of total revenue compared to 25 percent a year ago.

tw telecom also reported a 5.4 percent decrease in network services, primarily reflecting the net impact of churn and repricing for contract renewals. Network services revenue represents 20 percent of total revenue for the quarter, compared to 23 percent a year ago.

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