Paetec Holding Corp. on Thursday reported a $6.5 million third-quarter net loss on revenues of $395.7 million. The showing compares with a net loss of $6.9 million, excluding special items, on revenues of $406.1 million a year ago.
Paetec posted a net loss of 4 cents a share. The Street was expecting a loss of 3 cents a share and revenues of $396 million.
The company a year ago took a $340 million goodwill impairment charge and $3.8 million in integration and separation costs. The company attributed the 2.6 percent drop in revenues to a decline in access revenue and the so-called plain old telephone business. Lower usage drove carrier-service revenues down by $1.5 million in the quarter, Paetec said. Access fee revenues consist of inter-carrier compensation and reciprocal compensation for calls originated and terminated from other carriers.
“We are making smart moves by using this slowdown in the economy to analyze processes to drive further cost savings and to strengthen our sales efforts, thus positioning Paetec to be more efficient when growth accelerates,” Chairman and CEO Arunas Chesonis said in a statement.
Chesonis pointed to a strong cash position of $141.5 million and debt cut by $10 million with a voluntary paydown of its revolver at the quarter’s end. Sales, general and administrative expenses, excluding stock-based compensation, fell by $7.7 million, dropping 5.3 percent from the third quarter 2008.
Paetec affirmed its 2009 full-year guidance of revenues of $1.575 billion to $1.585 billion.
Paetec stock (Nasdaq: PAET) was up 20 cents, or 5 percent, at $3.55 at 10 a.m.
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