tw telecom inc. (TWTC), a provider of managed network services, Monday reported a return to profit for the fourth quarter, which the company attributes to revenue growth, cost synergies from network optimization efforts, and employee cost efficiencies.
The Littleton, Colorado-based company's quarterly net income was $4.97 million or $0.03 per share compared to a loss of $5.3 million or $0.04 per share in the previous year.
On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.05 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter increased 5% to $294.65 million from $279.48 million in the earlier year. Analysts expected revenues of $294.16 million for the quarter.
Operating income was $24.33 million, up from $14.32 million a year ago.
For the full year, the company's net income was $8.52 million or $0.06 per share, compared to a net loss of $40.27 million or $0.28 per share in the prior year. Analysts expected the company to earn $0.07 per share for the year.
Total revenues for the year grew to $1.159 billion from $1.083 billion in the preceding year. Street analysts anticipated revenues of $1.16 billion for the year.
Looking ahead, the company stated that the first quarter of 2009 will be impacted by historical trends, which include lower seasonal revenue growth and a sequential cost increase due to resetting of payroll taxes and other employee related costs. The fluctuation in these costs is expected to increase expenses by $4 million - $5 million sequentially in the first quarter over the fourth quarter.
Larissa Herda, chairman, chief executive officer and president said, "Our sales trends remained steady but revenue growth was dampened by the headwinds of churn and a challenging economy. For 2009, we expect the challenges to continue, but we remain focused on growth."
TWTC closed Monday's regular trading at $8.52 on the Nasdaq.
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