Consolidated Communications (Nasdaq: CNSL) reported that fourth-quarter 2013 revenues declined year-over-year to $148 million as increases in data and video revenues were more than offset by declines in subsidies and network access revenues.
Taking out the $2.2 million unfavorable subsidy adjustment, which was related to the universal service fund for the California market, revenues were $150.2 million.
The USF issue was due to SureWest missing a 2012 deadline to file a new annual certification for high cost support. Instead of just issuing a late fee, the FCC decided not to provide any of the funding. Consolidated said it has appealed the decision and "remains optimistic the decision will be reversed in 2014."
The service provider's acquisition of SureWest continues to produce positive results.
Bob Currey, CEO and chairman of Consolidated, said that it achieved "another $0.8 million in annualized synergies from the SureWest acquisition" and that it is "on schedule to complete the final phase of billing in the third quarter of 2014."
Per the trend seen across the wireline industry, Consolidated's local calling and long distance service revenues declined year-over-year to $26.5 million and $4.6 million, respectively. At the end of the quarter, it lost 11,792 ILEC access lines to end the quarter with a total of 256,805. It also lost 985 voice lines, a figure that includes both its CLEC operations and VoIP services.
Despite the overall revenue decline, the telco continued to see increases across its residential, business and wholesale carrier segments.
Overall data, video and Internet services revenue was $68 million, up from $67 million in the fourth quarter of 2012. It added 7,606 total data connections and 4,476 video connections, ending the quarter with total of 255,239 data and 110,613 video subscribers.
Two particular areas of growth were metro Ethernet and wireless backhaul, which Currey said "continues to be solid." During the quarter, the service provider installed fiber to 96 new cell sites, bringing its total for the year to 210.
Looking forward, the service provider forecast capex spending of $97 million to $103 million and cash interest of $75 million to $78 million.
Shares of Consolidated were listed at $18.91, down 51 cents or 2.63 percent, in Thursday morning trading on the Nasdaq stock exchange.
- see the earnings release
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