Consolidated Communications reported that in the third quarter of 2014, Ethernet services were a star performer in its portfolio, rising 14 percent year-over-year, but that was not enough to completely offset the drag of legacy service declines. Commercial and wholesale revenues rose 4.7 percent year-over-year.
During the quarter, the service provider added 8,521 data connections and 1,287 video connections, ending the quarter with a total of 261,027 and 111,179 connections, respectively. However, legacy ILEC access lines declined by 5.6 percent, or by 14,420, to end the quarter with a total of 245,185 access lines.
"Our strategic growth areas continue to perform well led by a 4.7 percent year-over-year increase in commercial and carrier revenues," said Bob Currey, chairman and CEO, in an earnings release. "We are continuing our transition away from legacy regulated revenues and into a premier provider of business and broadband solutions to all of our customer groups."
From an overall financial perspective, third-quarter earnings were $149 million, down year-over-year from $150.8 million in the same period a year ago. Similar to earlier quarters, declines in local and long-distance voice revenues, network access and subsidies were partially offset by growth in its data, video and Internet revenues.
Consolidated has updated its full-year 2014 guidance to include its recently completed acquisition of Enventis. The service provider has forecast cash interest expenses of $78 million to $80 million and capital expenses to be in the range of $129 million to $133 million.
By completing the Enventis acquisition, Consolidated immediately gains 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.
Currey said that the Enventis acquisition helped it achieve "approximately $4.5 million in annual synergies."
Wall Street did not respond positively to Consolidated's results as the company's shares were listed at $26.76, down $1.76 or 6.17 percent, in Thursday morning trading on the Nasdaq stock exchange.
- see the earnings release
Special report: Wireline telecom earnings in the third quarter of 2014
Consolidated's Bob Udell to become CEO in January, replacing Bob Currey
Consolidated's Q2 commercial sales rise 5.5%, but legacy declines continue to be a drag
Consolidated's Enventis deal shows ongoing need to diversify its revenue base
Consolidated to acquire Enventis for $350M in stock, enhancing fiber network reach
Consolidated's Childers: We'll grow our business service reach through acquisitions