Consolidated's Q2 commercial sales rise 5.5%, but legacy declines continue to be a drag
Consolidated Communications reported that second-quarter data, video and Internet sales were a key revenue driver, rising to $69.5 million, but legacy declines offset total company growth. The company reported a 5.5 increase in commercial sales year-over-year.
During the quarter, the service provider added 7,931 data connections, ending the quarter with a total of 259,225 connections. Another area of growth was video, adding 2,116 new subscribers and ending the period with a total of 111,211 customers.
"I'm pleased with the overall results in the quarter and the continued success in transforming the business away from declining legacy revenues and into a growing broadband company," said Bob Currey, chairman and CEO, in the earnings release.
Similar to earlier quarters, growth its data and video revenues and local calling services were offset by decreases in traditional voice network access and subsidy revenues, meaning that overall revenue remained flat at $151 million year-over-year.
Per the ongoing industry trend, the telco lost 12,595 landline connections in its ILEC territory, bringing it to a total of 249,986 lines at the end of the quarter.
To enhance its data and fiber holdings, the service provider announced earlier this month that it would purchase fellow independent ILEC Enventis for $350 million in stock.
Purchasing Enventis is important, particularly as it looks to expand its commercial and wholesale business base. Enventis comes to the table with 4,200 route miles of fiber serving its facilities-based business and wholesale customers in Minnesota and into Iowa, North Dakota, South Dakota and Wisconsin.
"The acquisition strengthens the diversification of our markets and fiber driven strategy, and positions us well for the future with an attractive dividend and an improved capital structure," Currey said.
Shares of Consolidated closed at $ 22.38, down 40 cents or 1.76 percent, at the close of Thursday afternoon trading on the Nasdaq stock exchange.
- see the earnings release
Special report: Wireline telecom earnings in the second quarter of 2014