Internet service provider Earthlink Inc. today offered its third quarter financial results. On rising revenue Earthlink noted it’s narrowed losses for the quarter, and reported gains in its broadband subscriber base.
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Earthlink posted a net loss of US$30.1 million for the quarter, compared to an $84.4 million loss for the same quarter a year ago. Excluding acquisition related amortization and accretion dividends, Earthlink’s net loss was about $645,000. Revenue posted for the quarter was $340.7 million, up 6.8 percent year over year. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $22.4 million, about $1.5 million better than Q3 2001.
Earthlink ended the quarter with 681,000 broadband subscribers, up 77,000 for the quarter and up 67.7 from the prior year quarter. The move offset losses of dial-up subscribers, down 5.2 percent to 3.9 million. Earthlink said it has about 4.8 million paying subscribers, up 1.2 percent from the prior year though down a bit from the end of June. Customer churn dropped one tenth of a percentage point to 3.7 percent for the quarter, which Earthlink attributed to improvements in customer service and subscriber migration to broadband product offerings.
Earthlink expects to net “in the upper end” of 250,000 – 300,000 new broadband customers for the year, with a total of about 5 million paying subscribers by year’s end.
Earthlink adjusted guidance for the fourth quarter downward a bit from its July estimates — the company expects to report revenue of $1.35 – $1.37 billion for the year, with losses expected to be in around 21 to 25 cents per share, or 3 to 7 cents more than it expected to report in July. Earthlink also anticipates reporting EBITDA of about $60 million. Earthlink CFO Lee Adrian attributes the missed targets to softer-than-expected revenues in the company’s dial-up business.