Monday, August 06, 2012

EarthLink's Second Quarter

I did not see this coming: EarthLink's revenue fell 7% to $338.2 million. EarthLink also announced that Joseph Wetzel, its president and COO, is leaving on Dec. 31.

"EarthLink is dealing with intense competition for consumer and business customers. It faces a dwindling base of dial-up Internet subscribers as more people switch to higher-speed access. It has made several acquisitions to help broaden its business services."

And why haven't those acquisitions resulted in bigger quarterly revenues??

EarthLink reported revenue of $344.4 million in the first quarter.

EarthLink reported total company revenue of $338.2 million in the second quarter of 2012, a 2% decrease from the prior quarter and a 7% decrease from the year-ago quarter.

Unless dial-up and consumer revenue is drying up faster than they can buy revenue, this doesn't make a lot of sense. The other possible factor is that Deltacom and ONE sold really cheap circuits at low low margin. Maybe ELNK has dumped or not renewed those customers.

There are set-asides, but does that effect revenue?

"Dragging the company’s bottom line into the red was $8.3 million set aside to cover unpaid Universal Service Fund payments by ITC DeltaCom, which EarthLink bought in 2010. [Democrat-Chronicle]

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