HickoryTech reported that its fiber and data segment was once again the shining star, with revenues rising 6 percent year-over-year to $17.7 million due to an increase in high capacity fiber and data sales to both retail businesses and wholesale carrier customers.
Business revenues rose 9 percent to $9.6 million, while wholesale rose 2 percent to $7.8 million. Fiber and data segment net income was $1.7 million, an 81 percent year-over-year increase.
"We continue to execute on our strategy and were able to grow fiber and data revenue 6 percent in first quarter as we expanded our fiber distribution networks and built fiber to additional business customers," said John Finke, HickoryTech's president and CEO, in the earnings release. "We delivered four consecutive quarters of consistent outcomes and growth in our fiber and data business."
However, the company saw declines in both its equipment and telecom segments.
Equipment segment revenue was $12.2 million, down 29 percent year over year. Likewise, equipment sales revenue was $10 million, down 35 percent compared to a year ago. HickoryTech said that equipment revenue tends to fluctuate quarter to quarter based on timing of sales and installation periods. One bright spot in the equipment segment was support services, which rose 19 percent from the first quarter of 2013 to $2.2 million.
Similar to other telcos, HickoryTech's telecom segment revenue dropped 2 percent to $14.4 million, a factor it attributes to legacy service declines primarily in network access and local service revenue.
Broadband service revenues grew 5 percent, offsetting part of the telecom revenue decline. DSL subscribers rose 4 percent and digital TV subscribers were up 8 percent, ending the quarter with a total of 21,178 and 11,788 subscribers, respectively. At the same time, competitive price compression is having an impact on broadband service growth rates.
Looking toward the rest of the year, the telco maintained its previous fiscal 2014 outlook that forecast revenue to be within a range of $189 million to $199 million. It also expects growth in business and broadband revenue to offset the majority of the declines in legacy telecom services.
Shares of HickoryTech were listed at $11.86, down 1 cent or 0.08 percent, on the Nasdaq stock exchange.
- see the earnings release
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