EarthLink profits on cost cuts

After exiting the citywide Wi-Fi business and getting rid of its investment in Helio, EarthLink has managed to boost its quarterly profits to $54.7 million.

Internet service provider EarthLink has turned the corner.

On Tuesday, the company reported profits of $54.7 million, or $0.49 per share, for the third quarter of 2008, compared to a net loss of $79.4 million, or $0.65 per share, during the same quarter a year ago.

The company's revenues were actually down about 22.5 percent, compared to last year. It brought in only $230.8 million, compared to revenue of $298 million in the third quarter of 2007.

EarthLink's financial turnaround comes as a result of massive cost-cutting. The company sold off and shut down two major initiatives this year. First, it exited the citywide Wi-Fi market, leaving cities like Philadelphia with a nearly completed Wi-Fi network, and no one to run or maintain it. A group of investors eventually took over the Philadelphia network.

EarthLink also sold its stake in mobile virtual-network operator Helio. The phone company, which had been a joint venture between EarthLink and Korean cell phone operator Helio, was sold to Virgin Mobile this summer.

EarthLink is now focusing its business on providing broadband and dial-up Internet service. While the dial-up business is dying a slow death, EarthLink's executives still see it as a cash cow. Earlier this year, the company was rumored to be interested in buying AOL's dial-up business to help boost this part of its business.

Featured Video
This content is rated TV-MA, and is for viewers 18 years or older. Are you of age?
Sorry, you are not old enough to view this content.

The one thing every refrigerator owner should know

One key factor determines how long your food stays fresh (and how much you end up wasting). Sharon Profis shares a few refrigerator organization tips everyone should know on "You're Doing it All Wrong."

by Sharon Profis