Lumos Networks revenue declines slightly in Q2 to $50.8M

Earnings buoyed by strong uptick in retail data, wholesale wireless backhaul revenues
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Lumos Networks (Nasdaq: LMOS) reported Thursday that its second-quarter 2012 revenue declined slightly due to expected revenue loss in its traditional POTS voice business while strategic data service and wholesale revenues rose.

For the quarter, the ILEC's total revenue was $50.8 million, down from $52.1 million in the same period last year, and $51.4 million in Q1 2012. Likewise, EBITDA declined to $21.1 million, from $25.0 million in Q2 2011, and to $22.3 million in Q1 2012.

Business services and wholesale continue to be two of Lumos' revenue drivers.

During the first half of the year, strategic-data product revenue grew 16 percent over the first half of 2011. Revenues from all four of its data products--enterprise data, carrier class data, Fiber-to-the-Cell-Tower (FTTC) and residential and small business--grew almost 3 percent sequentially.

FTTC, in particular, has been one of the ILEC's main wholesale service priorities. The service provider said that that it is on track to double the number of FTTC installations, from about 150 at the end of 2011, to approximately 300 at the end of 2012.

"Revenue from our strategic data products continued to grow sequentially during the second quarter of 2012 and is on track for annual year-over-year revenue growth in excess of 15 percent," Tim Biltz, CEO and president of Lumos Networks, said in the earnings release.

Lumos Networks' wholesale and retail data service expansion strategy, however, is not based on a build-it-and-they-will-come mentality. About 75 percent of the telco's total capital expenditures are planned for success-based strategic data projects, up from 50 percent last year.

Looking towards Q3, Lumos has forecast total revenues to be between $50 million and $51 million and adjusted EBITDA to be between $21 million and $22 million. For full-year 2012, the telco retained its previous guidance for total revenue to be between $200 million and $205 million and adjusted EBITDA expected to be between $85 million and $90 million.

Blitz said data services will provide it with a growth pipeline for 2013. "As we exit 2012, we believe that our strategic data revenue growth momentum will position the Company to achieve overall annual year-over-year revenue growth starting in 2013."

Shares of Lumos were trading at $8.62, down 0.07, or 0.81 percent, in mid-morning trading on the Nasdaq.

For more:
- see the earnings
release

Special Report: Wireline in the second quarter of 2012

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