EarthLink revenues up, but still sees loss

When EarthLink, the Internet Service Provider in which Apple has invested, announced its recent financial results, it was a good-news, bad news scenario.

The good news is that revenues are up due to the company’s expanding broadband subscriber base. The bad news is that the company lost money during the second quarter, though the loss was smaller than the same period last year.

Overall, EarthLink reported a net loss of US$40.4 million, or 27 cents a share, compared with a loss of $98.7 million, or 75 cents a share, a year earlier. Unfortunately, revenue rose more slowly than analysts expected as high-speed subscriber growth was offset by a nearly 7 percent decline in dial-up customers.

Revenue rose 10.4 percent to $333.5 million. However, that’s below the range of $338 million to $342 million EarthLink predicted in April. Excluding items such as amortization and depreciation, the loss narrowed to $10.8 million, or 7 cents a share, from $35.1 million, or 27 cents, a year before. Wall Street analysts, on average, expected a loss of 9 cents a share on revenue of $339 million, according to Thomson First Call. The company said earnings before interest, taxes, depreciation and amortization totaled $12 million.

EarthLink said it added 72,000 new high-speed subscribers during the quarter, ending with 604,000 broadband customers. The Atlanta-based company said its dial-up subscriber base fell 6.6 percent to 4.08 million, bringing total paying subscribers to about 4.9 million, down 0.6 percent from a year earlier.

EarthLink said it still expects to add 250,000 to 300,000 broadband subscribers during 2002 and end the year with about 5 million to 5.2 million total paying subscribers. The company’s shares closed Monday at $4.73 on Nasdaq. The stock is down more than 60 percent since the beginning of the year.