Tuesday, Internet service provider EarthLink Inc. (ELNK), reported a decline in profit for the first quarter, hurt in large part by a higher income tax provision. Earnings, though down from last year, came in ahead of analysts' consensus by three cents, while revenues fell short.
The Atlanta, Georgia-based company's net income for the first quarter dropped to $32.50 million or $0.30 per share from $51.71 million or $0.47 per share in the prior-year quarter.
Income from continuing operations for the quarter decreased to $32.50 million or $0.30 per share from $55.10 million or $0.50 per share last year.
On average, six analysts polled by Thomson Reuters expected the company to earn $0.27 per share for the quarter. Analysts' estimates typically exclude special items.
Results for the quarter included an income tax provision of $20.94 million, compared with $9.30 million in the same quarter last year.
Total revenues for the quarter dropped 24% to $199.10 million from $263.10 million in the same quarter last year. Wall Street analysts' had a consensus revenue estimate of $202.97 million for the quarter.
Segment-wise, access and service revenues for the quarter decreased to $178.70 million from $234.85 million in the year-ago quarter. Value-added services revenues were $20.40 million, down from $28.23 million in the previous year quarter.
Churn rate for the quarter was 3.9%, compared with 4.9% in the corresponding quarter last year.
Total operating costs and expenses for the quarter were significantly lower at $141.60 million, compared with $197.70 million in the prior-year quarter.
EarthLink ended the first quarter with $565.8 million in cash and marketable securities, an increase of $31.5 million from December 31, 2008.
For fiscal year 2009, the company raised its guidance for income from continuing operations to a range of $90 million - $100 million, compared to the earlier forecast of $75 million - $95 million.
ELNK is currently trading at $7.53, up $0.17 or 2.31%, on a volume of 0.98 million shares on the Nasdaq.
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