WVT Communications Q3 revenues up 3% on strong UC growth
WVT Communications (NYSE MKT: WVT) reported on Friday that revenues rose 3 percent to $7.1 million, up from $6.8 million in Q3 2011.
As its traditional telephone business revenues continue to decline, WVT sees the majority of growth coming from its unified communications (UC) and cloud communications services sets.
During the quarter, UC service revenues grew 38 percent to $3.6 million, up from $2.6 million in Q3 2011. Buoyed by its acquisition of Alteva in August 2011, WVT's UC segment contributed over 51 percent of revenues versus 38 percent in the same period a year ago, and 47 percent in Q2 2012.
The growth in cloud and UC services comes at a time when traditional telephone service revenues declined year-over-year to $3.4 million in Q3 from $4.2 million in Q3 2011. WVT attributes the decline to lower Universal Service Fund revenues and the termination of the National Rural Telecommunications Cooperative (NRTC) contract as of Aug. 15, 2011.
WVT said that the "termination of the NRTC contract changed our DIRECTV services revenue from monthly recurring to one based on sales commissions and reimbursements for installation costs and losses due to wireless substitution and competition for other triple play service providers offset by an increase in access lines rates."
Gross profit rose 29 percent in the quarter to $3.6 million from $2.8 million in the same period a year ago.
For WVT, the third quarter was a time of change at the once POTS-centric rural telephone company.
In addition to seeing growth in UC services, the service provider changed its stock listing from the Nasdaq Global Market to the NYSE Euronext's MKT and began the process of restructuring into an unregulated holding company, which will transfer its regulated local telephone business to a new wholly-owned subsidiary.
WVT was trading at $12.60, up $0.16, or 1.29 percent, in morning trading on the New York Stock Exchange (NYSE).
- see the earnings release
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