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EarthLink Revenue Slips, But Company Beats Expectations

EarthLink, the IT, network and communications services provider for businesses, brought in more money than analysts had projected last quarter.

Revenue was $320 million down from $344 million in the year-ago quarter and $332 million in Q4 2012 but that beat Wall Street’s expectations of $318 million. That was enough to give the Atlanta-based company’s stock a 2 percent boost on Thursday to close at $5.75. That number was up to $5.95 as of 10:55 a.m. ET on as it rode the overall uptick in the market on Friday.

"The first quarter of 2013 was one of substantial progress for our company. We opened several new next-generation data centers [in Chicago, San Jose, Dallas and Rochester], completed the majority of our new unique fiber network routes (Memphis to Chicago; Atlanta-Miami; and Ashburn, Va. to Birmingham and New York City) and had our best quarter of sales bookings since 2011," said EarthLink Chairman and CEO Rolla Huff. "We expect this momentum to further accelerate throughout 2013 as we continue to approach the inflection point of sustained positive growth."

The company said in its earnings call that another new data center in Miami will be up and running in about a month. EarthLink also just this week introduced a cloud-based disaster-recovery service that it says protects data, applications and the operating environment from accidents and disasters, power outages, and server crashes by continuously replicating the primary server to an EarthLink data center.

EarthLink’s losses were $7.5 million but $236.4 million if you count a pretax, non-cash goodwill impairment charge. The $7.5 million was about the same as in Q1 2012 and up from just $9,000 in the fourth quarter.

The company’s business services revenue was approximately $248 million in the first quarter of 2013, compared to $256.5 million in the fourth quarter of 2012 and $260.3 million in the first quarter of 2012. Business services segment revenue, which accounted for 77 percent of EarthLink’s revenue in the first quarter of 2013, declined less than 1 percent from the prior quarter.

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