8×8 Profit Soars Despite Rivals, Economy

8×8 Inc. (EGHT) saw its net income soar in the third fiscal quarter of 2010, despite economic troubles among business and residential customers, and competitors’ pricing.

The hosted VoIP provider on Wednesday reported a $1 million profit, compared to $180,000 in the year-ago period. The news cheered Wall Street and bumped up 8×8’s share price by more than 7 percent for a $1.30 close.

However, there were some sticking points, showing that even hosted services aren’t competition- or recession-proof. For one thing, 8×8 lost 41 percent of its residential subscribers because of “competitive pricing pressure from triple-play and free international calling offers,” said Bryan Martin, 8×8’s chairman and CEO. And even though business customer revenue was up 19 percent from a year ago, 8×8 lost some accounts to what Martin called “financial hardship.”

Still, businesses now chip in 79 percent of 8×8’s overall sales, up from 66 percent in 2009’s fiscal third year. And, despite some turnover, “we witnessed our lowest overall churn to date,” Martin said.

Nonetheless, 8×8’s revenue suffered a little. The company reported $15.9 million in sales, compared to $16.2 million in 2009’s fiscal third quarter. Profit also took a small hit from a non-cash, $265,000 charge for stock-related price appreciation.

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