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EarthLink posts profit, but revenue falls

ISP says revenue declines reflect the continuing defection of its premium dial-up subscribers to other high-speed services.

Reuters
EarthLink, the No. 3 U.S. Internet service provider, posted a quarterly profit on Thursday, reversing a year-earlier loss.

Revenue declined, however, reflecting the continuing defection of its premium dial-up subscribers to other high-speed services.

The company's premium dial-up service continues to lose ground to high-speed services provided by cable and phone companies. But the company is betting that its own add-on broadband service and its discount service can offset those losses.

The Atlanta, Ga.-based company posted first-quarter net profit of $33.3 million, or 22 cents a share, compared with a net loss of $11.8 million, or 7 cents a share, a year earlier, which included a charge from facility exit costs.

Revenue fell 4.8 percent to $334.7 million from $351.6 million.

The average Wall Street profit estimate was 21 cents a share, on revenue of $332.8 million, as compiled by Reuters Estimates.

Total subscribers rose 1.3 percent from a year ago, helped by a 26 percent increase in its high-speed subscribers. Dial-up subscribers fell 5.3 percent.

The company said it expects second-quarter revenue to be $325 million to $330 million and it expects to add 50,000 to 75,000 net subscribers in the second quarter. The average second-quarter Reuters revenue estimate is $329.2 million.