Internet service provider
today offered details on its first quarter financial results for the period ending March 31, 2002. Revenues grew for the quarter, and the company has exceeded one half million subscribers to its high-speed service.
Revenues for the quarter grew 13 percent year over year, to US$333.4 million. Quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) were $6.5 million, a $25 million improvement year over year. Net loss for the first quarter was negative $19.0 million, again, a hefty improvement over Q1 2001, when EarthLink posted a $35.1 million loss.
Breaking down the numbers, EarthLink indicated that $262.7 million of its quarterly revenue was derived from its so-called “narrowband” services, or dial-up services. The company actually lost about 100,000 subscribers since Q1 2001, which it attributes to the price increases it implemented during the second half of last year and the continued migration of customers to high-speed access. EarthLink also managed to add another 89,000 subscribers during the quarter by acquiring smaller ISPs, including 30,000 wireless subscribers through OmniSky.
High-speed revenues generated $54.0 million for EarthLink during Q1, a 67 percent year over year increase. The company ended the quarter with 532,000 broadband subscribers — 85 percent more than a year ago and 13 percent more than its year-end number. Web hosting revenues made up the bulk of the remaining numbers, with some addition money pulled in through advertising, content and commerce revenue.
EarthLink said it ended the quarter with cash and equivalents of about $554.2 million. It used about $39.8 million in cash for the quarter.
EarthLink noted that during this quarter the company has launched high-speed Internet access in six more markets, making the service available to a total of about 16 million homes in 26 markets. It has also announced a multiple ISP agreement with AT&T Broadband service in Boston and Seattle to launch later this year, paving the way for more high-speed cable subscribers to use EarthLink if they prefer. The company also expanded its home networking support to include cable modem customers.
EarthLink also acquired Disco and OmniSky, launching EarthLink Wireless Email and Internet Service on Palm OS and PocketPC devices. The initiatives enable EarthLink to better compete in the wireless Internet access market.
Looking forward, EarthLink plans to have 5.2 million paying subscribers by year’s end. The largest number of these new subscribers will be high-speed access users connecting to the Internet through cable, DSL and satellite options offered by EarthLink. EarthLink wants to add a total of 250,000 – 300,000 users to its high-speed roster this year. EarthLink also anticipates growth in its MailStation Internet appliance, especially as the year draws to a close with a heavy holiday buying season.
All in all, EarthLink hopes to improve operating margins, and anticipates to close the year with a net loss of $0.14-$0.24 per share.