With its Q3 results released yesterday after the market closed, EarthLink offered few surprises. The one time dialup giant and now cloud IT services player has spent the last few years integrating and supplementing acquired assets, assembling a cloud-based portfolio of managed services, churning off revenues that don't fit, and generally not getting much credit for all their hard work with investors.
Revenue fell $4.8M sequentially to $308.6M, which was right on the money when it came to composite analyst expectations. Retail growth product revenue reached an annualized run-rate of $180M, up from $157M during Q2, while total growth product revenue reached an annualized run-rate of $324M, up from $313M during Q2. Still a long way to go, but moving forward nonetheless.
EBITDA margins dipped to 18.2%, but loss per share managed to come in a penny ahead of expectations. Looking ahead, Earthlink adjusted its full year 2013 guidance. The revenue and net loss ranges fell slightly to $1.240-1.245B, while the adjusted EBITDA, capital expenditures, and net loss ranges improved to $222-227M, $140-155M, and $282-280M, respectively.
According to CEO Rolla Huff, "most of the network integration is behind us and the majority of the system integration will be complete as we exit the first quarter 2014." That suggests that EarthLink's very long rebuilding year may finally start to melt away when this winter's snow does.
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