Quoting: telephonyonline
EarthLink posts Q2 loss
By Mark Donahue
Jul 26, 2007 1:13 PM
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EarthLink reported a second-quarter loss today as its revenues fell to $312.2 million--down 6% compared to the same period last year--linked largely to a drop in subscribers and the company's ailing joint wireless venture, Helio.
Revenue from the consumer services segment decreased to $264.1 million, or 7.9%, driven in part by a 10.2% drop to $231.7 million in access services tied to declines in premium narrowband and broadband services.
The Internet service provider also saw its overall subscribers decrease by 177,000 net subscribers compared to Q1 2007. (This excludes the previously announced removal of 753,000 Embarq subscribers.)
EarthLink did see some reprieve in consumer services as it posted a 13.5% increase to $32.4 million in value-added services revenue. And earnings from the business services segment increased to $48.1 million, or 6%, primarily due to subsidiary New Edge Networks.
"While EarthLink continues to see robust cash generation from our core access business, we have been challenged in achieving planned results in our emerging growth initiatives," said Rolla Huff, president and CEO of EarthLink, in a prepared statement. "Over the past four weeks, I have had an opportunity to do initial reviews of each of our business units, as well as the Helio investment.
Helio, EarthLink's joint wireless venture with SK Telecom, rang up an $83.8 million net loss in the second quarter while generating $33.2 million in revenue. The company said it is making investments in infrastructure, products and marketing to support future growth of Helio.
Huff, who was appointed president and CEO in late June, has taken the helm during some rough waters for the company. EarthLink lost former CEO Charles "Garry" Betty in January from cancer complications and went on to post a first-quarter loss.
