HickoryTech (Nasdaq: HTCO) on Tuesday reported that Q4 2012 revenue was $46.6 million, up 18 percent year-over-year due to an uptick in fiber business and consumer broadband services.
The telco's net income was $2.5 million, up 60 percent year-over-year, while earnings per share totaled 19 cents per diluted share, up 55 percent from Q4 2011.
A key revenue driver in HickoryTech's Q4 2012 results came from its Fiber and Data services segment, which was boosted by its acquisition of Fargo, N.D.-based IdeaOne.
"With 76 percent of our revenue coming from business and broadband services, our increasingly diversified revenue sources have allowed us to manage the regulatory challenges and declines in our legacy telecom operations," said John Finke, HickoryTech's president and CEO, in the earnings release. "Looking forward, we remain focused on growing our business services and completing our greater Minnesota broadband project, which further expands our fiber network and gives us access to additional markets."
Here's a breakdown of HickoryTech's key metrics:
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Fiber and Data Segment: Fourth quarter Fiber and Data revenue was $16.4 million, up 36 percent year-over-year. The telco attributes the revenue increase to two factors: new sales in retail wholesale transport and the addition of the IdeaOne operations into its fold. Excluding the IdeaOne operations, HickoryTech said Fiber and Data revenue increased 8 percent year-over-year. Fiber and Data Segment operating income was $2.7 million, a 35 percent increase year-over-year.
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Equipment Segment: Driven by strong equipment hardware sales, Equipment Segment revenue rose 44 percent year-over-year to $14.8 million. Equipment revenue rose 59 percent to $13.3 million, while Support Services revenue declined 22 percent to $1.6 million.
- Telecom Segment: As seen with other wireline telcos, HickoryTech's Q4 2012 Telecom Segment revenue declined 10 percent to $16 million due to ongoing losses in network access, local telephone service and legacy service revenue. The telco said the declines were the result of various factors, including access reform regulation, the expiration of interstate infrastructure support reimbursements, access line and minute-of-use erosion and increased competition. It did report a 2 percent increase in DSL subscribers and a 3 percent increase in Digital TV subscribers. However, competitive price compression from local cable operators impacted broadband revenue, which was down 4 percent year-over-year.
Looking towards the rest of 2013, HickoryTech has forecast revenue to be within the range of a 2 percent decline to a 3 percent increase as compared to 2012 revenue. The service provider does expect business revenue growth to offset much of the legacy telecom services declines.
Shares of HickoryTech were listed at $9.40 at 4 p.m. ET on Tuesday at on the Nasdaq stock exchange.
For more:
- see the earnings release
Earnings roundup: Wireline telecom earnings in the fourth quarter of 2012
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