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EarthLink's third-quarter profit falls, revenues edge up

Rochester Business Journal
October 30, 2012

EarthLink Inc. topped Street expectations despite seeing its third-quarter profit shrink from a year ago, though it rebounded from a second-quarter loss.
The telecommunications and IT services company posted a net income of $1.4 million, or a penny a share, for the third quarter, down from $7.5 million, or 7 cents a share a year ago.  EarthLink logged revenues of $334.8 million, down 6 percent from a year ago.

Analysts had forecast a loss of 2 cents a share and revenues of $333.8 million, Thomson Reuters reported.

The company said on Tuesday business services revenue declined $400,000 during the third quarter. However, business services comprised 77 percent of EarthLink’s revenue, up from 74 percent a year ago. Consumer revenue declined $3 million, compared with a $4.4 million decline a year ago.

EarthLink also announced plans to expand its IT solutions services with four more data centers. The company said it will launch its cloud hosting platform in new data centers in San Jose, Chicago, Dallas and Florida next year. It is also enhancing its existing data center in Rochester.
The new data centers will give EarthLink a total of eight data centers, all linked to its nationwide IP network. To help interconnect its data centers, the company said it will extend and enhancing its fiber network from Miami to Virginia, and build its fiber network into Texas. The company expects to spend $45 million over the next year on the projects.

“This quarter was one of continued progress as we move closer to our goal of transforming EarthLink into a nationwide IT services business,” said Rolla Huff, CEO and chairman of EarthLink, in a statement. “From both a strategic and financial perspective, we believe EarthLink is positioning itself to capitalize on the significant IT services market opportunity.”

(c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

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