Shentel's wireline fiber lease revenues drop to $8M in Q1

Shentel reported that its steady wireline fiber lease revenues dipped to $8 million in the first quarter 2015, down from $8.1 million in the same period a year ago.

"The reduction is a result of revenue adjustments recorded in both periods," said Earle MacKenzie, EVP and COO of Shentel, during the earnings call, according to a Seeking Alpha transcript. "In the first quarter of 2015, we signed $4.8 million in new non-affiliated fiber contracts compared to $2.8 million in 2014."

Out of this mix, affiliate fiber lease revenue was $4.1 million, while non-affiliate revenue was $3.9 million, down from $4.2 million and $3.9 million in the first quarter 2014. From an external fiber lease perspective, Shentel reported that the wireline segment generated $2.8 million in revenue, while cable contributed $2 million in sales.

Despite seeing the slight decline in wireline and cable fiber leasing revenues, MacKenzie said that "our wireline segment continues to be very stable."

The telco ended the quarter with a total of 21,669 voice access lines, down year-over-year from 21,955, while reporting slow but steady DSL growth. It ended the quarter with a total of 12,825 DSL users. Broadband penetration in its local exchange carrier area reached 59.2 percent during the quarter.

Operating income for the wireline segment was $3.8 million, down from $4.4 million in the first quarter 2014. Carrier access and fiber revenue for the quarter was $9.5 million, a decrease from $9.9 million for the same quarter last year, due to favorable NECA pool adjustments that increased access revenues in the first quarter of 2014. Finally, adjusted OIBDA for the wireline segment for the first quarter of 2015 was $6.9 million, as compared to $7.2 million in the first quarter of 2014.

For the quarter, total company net income was $10.3 million, up from $8.6 million in the first quarter of 2014 due to continued growth in the wireless and cable segments. Operating income was $18.5 million, up 18 percent from the same period a year ago.

Shares of Shentel were listed at $33.67, down 15 cents or 0.44 percent, in Tuesday afternoon trading on the Nasdaq stock exchange.

For more:
- see the earnings release
- and the Seeking Alpha earnings transcript

Special Report:  Wireline telecom earnings in the first quarter of 2015

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