tw telecom Q4 2011 revenue rises on strong Ethernet, IP service sales
tw telecom's (Nasdaq: TWTC) prudent focus on delivering Ethernet and IP-based services to businesses continued to bear fruit as the competitive provider reported $351.5 million of revenue in the fourth quarter of 2011.
For the year 2011, the competitive provider grew revenue 7.4 percent to $1.367 billion, up from the 5.1 percent it reported in 2010.
"In 2011, we excelled financially, operationally and strategically through a balanced approach to the business that yielded a strong and consistent performance, highlighted by our 29th consecutive quarter of revenue growth, ongoing strong margins and continued strong cash flow," said Mark Peters, tw telecom's Executive Vice President and Chief Financial Officer.
A big contributor to fourth-quarter and overall year growth was once again enterprise services. On a year-over-year basis, enterprise customer revenue increased 11.2 percent, or $27.6 million, due to growing adoption of the company's data and Internet services.
Driven by gains in strategic Ethernet and IP-based products, including IP VPNs, data and Internet service increased 18.3 percent to almost $172 million. Data and Internet revenue represented 49 percent of total revenue for the quarter compared with 45 percent in the same period in 2010.
Voice services also fared well in the fourth quarter, increasing 6.0 percent year over year. The service provider attributed voice growth to sales of converged and other voice solutions, as well as an increase in both the volume and rate of certain taxes and fees, partially offset by churn.
However, there were some losses. Wholesale revenue declined $0.2 million due to churn and repricing for contract renewals offset by Ethernet services provided to wireline and wireless carriers. The company also reported a 0.7 million decrease in intercarrier compensation primarily due to fluctuations in disputes and rate reductions.
Despite the revenue uptick, higher expenses did drive a slight dip in year-over-year quarterly profit, from $17.5 million in the last quarter of 2010 to $16.4 million.
Looking towards Q1 2012, the service provider forecast that results could be affected by seasonal revenue fluctuations and cost increases, including a $3 million sequential cost increase due to the annual resetting of payroll taxes.
Larissa Herda, tw telecom's Chairman, CEO and President, said that throughout 2012 the company will look at ways to advance its "new Intelligent Network capabilities and enabling customers' changing consumption models that drive data center and cloud demand."
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