FairPoint reported that Ethernet service revenues contributed about $19.9 million in revenue in the first quarter of 2014, up from $14.9 million a year ago, as retail and wholesale circuits grew 56.6 percent year-over-year.
Per the trend that's been taking place at the telco during recent quarters, FairPoint said the growth in its Ethernet products is "expected to continue based on demand from customers like regional banks, healthcare networks and wireless carriers."
During the quarter, it added 224 retail and 382 wholesale Ethernet circuits, ending the period with a total of 10,123 circuits.
An increase in new Ethernet customers and broadband subscribers drove up data and Internet services revenues 10.9 percent sequentially to $42.3 million, which is an increase for the fifth consecutive quarter.
Broadband services were also a factor during the first quarter. Driven by ongoing investments to increase capacity and broaden its reach to more customers, it added 1,700 subscribers to reach a total 331,538 subscribers at the end of the quarter.
FairPoint said that it continues "to see strong interest in our broadband products and a lessening impact on our subscriber count from our continuing effort to improve the credit profile of customers."
However, it did report that voice services declined $3 million due to fewer lines in service, promotional discounts on certain residential products that have now been discontinued and seasonality. Likewise, access revenue declined $3.8 million primarily due to fourth-quarter 2013 revenue assurance activities that it said did not recur to the same extent in the first quarter of 2014 partially offset by lower service quality penalties.
Interestingly, FairPoint narrowed its voice access line declines to 6.8 percent year-over-year from 7.8 percent a year ago. It said the slower decline was driven by a reduction in the rate of loss in residential voice, business voice and wholesale access lines. As of the end of the quarter, the telco had a total of 863,410 access lines.
From an overall financial perspective, first-quarter revenue was $231 million, down year-over-year from $235.5 million in the same period a year ago due to expected declines in local and long-distance sales.
During what it says is a period of revenue stabilization, FairPoint is maintaining its previously stated guidance for 2014 of $930 million to $940 million in revenue, yielding $100 million to $110 million of unlevered free cash flow.
Shares of FairPoint were trading at $14.13, up 32 cents or 2.32 percent, in late Monday afternoon trading on the Nasdaq stock exchange.
- see the earnings release
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