tw telecom Q1 2012 revenue grew 7.9% on Ethernet, IP/VPN sales

tw telecom's (Nasdaq: TWTC) laser focus on selling Business Ethernet, converged and IP VPN solutions to enterprises is a formula that continues to work for the Littleton, Colo.-based CLEC as it reported that revenues rose to $358.9 million, up 2.1 percent from $351.5 million in Q4 2011.

Larissa Herda, tw telecom

Herda

On a year-over-year basis, the CLEC's revenue increased 7.9 percent, or $26.4 million from Q1 2011.

"We posted our 30th consecutive quarter of sequential revenue growth, delivered strong margins, and grew both net income and levered free cash flow, while we continued to advance the business with new products and capabilities," said Larissa Herda, tw telecom's chairman, CEO and president in the earnings release.

Once again, the revenue growth drivers in its service portfolio were data and Internet, a pair that grew 3.0 sequentially and 16.2 percent year-over-year. These growth trends were the result of a 23.7 percent year-over-year increase in strategic Ethernet and VPN-based product revenue.

In addition to Ethernet and VPN services, it reported a 7.9 increase in voice services, a result it attributes to sales of converged and other voice solutions along with an increase in volume and rate of certain taxes and fees that were offset by churn.

From a customer standpoint, enterprises' purchase of data services led the charge, up $27.7 million, or 10.9 percent year-over-year.

However, it did report losses in its wholesale and network services.

Wholesale services declined $1.1 million, a factor it attributes to churn and re pricing for contract renewals, which was partially offset by Ethernet sales to wireline and wireless operators. Network services declined 5.3 percent, which it also said was a factor of churn and repricing of contract renewals mainly for transport services, which outpaced growth in high capacity and colocation services.

Not content to rest on its laurels, tw telecom plans to roll out its Enhanced Management, or Phase I of what it calls its Intelligent Network capabilities for converged, VPN and Ethernet services this summer. And with Ethernet being the core of its offerings, it is going to offer a new Ethernet solution beginning in the second half of the year that it says will offer "ubiquitous national Ethernet coverage from a single connection point to buildings." This capability will be obviously key to multi-site customers that want to work with a single provider to get their Ethernet connectivity.

tw telecom's stock was trading at $22.73, up $1.15 or 5.33 percent in late morning trading on Wednesday on the Nasdaq stock exchange.

For more:
- see the release

Special report: Wireline in the first quarter of 2012

Related articles:
tw telecom ups its Minnesota colocation bandwidth
UPDATED: tw telecom maintains focus on organic fiber network growth
tw telecom Q4 2011 revenue rises on strong Ethernet, IP service sales
tw telecom to deliver services to government agencies in GSA's Region 9
tw telecom brings Ethernet/VPN expertise to American Founders Bank

Suggested Articles

Deutsche Telekom's T-Systems subsidiary has deployed VMware's disaster-recovery-as-a-service platform on its Dynamic Services for Infrastructure (DSI…

Google is investing 3 billion euros ($3.3 billion) to expand the company's data footprint across Europe over the next two years.

When it comes to its fiber deployments, Verizon is hitting its stride, according to Verizon Chairman and CEO Hans Vestberg.