tw telecom (Nasdaq: TWTC) reported that fourth-quarter revenues rose 5.9 percent to $400 million due to strong enterprise service growth, but it foresees some rocky spending patterns taking place in 2014.
For the year 2013, tw telecom's revenue was $1.56 billion, and it had $36.5 million in net income.
Driven by data and Internet services, enterprise revenues rose 7.5 percent, or $22.5 million. However, the service provider said these results were partially offset by a favorable $2.2 million customer settlement in 2012.
Data and Internet services revenues rose 13.1 percent to $224 million due to an increase in strategic Ethernet and VPN products. Data and Internet revenue now represent 56 percent of total revenues, up from 52 percent in the fourth quarter of 2012.
It also saw gains in the voice services segment, which grew 2.5 percent as a result of converged and other voice solutions. Voice services revenues represented 23 percent of total quarter revenue, down from 24 percent in the same period a year ago.
One area of loss was network services, a segment that declined 7 percent and now represents 19 percent of total revenue. tw telecom said the decline reflected the impact of churn and contract renewal re-pricing but was partially offset by growth in dedicated Ethernet services.
To create a foundation for new growth, the service provider announced in November that it would expand its metro fiber footprint by 17 percent while hatching a plan to enter what it calls five new "high-demand" markets. It also plans to increase the density of its metro fiber footprint in 27 existing markets it already serves.
"Our strategic market expansion is on track and we expect to fully integrate our expanded fiber reach and launch our new markets over the course of 2014," said John Blount, president and COO, in the earnings release.
Looking forward, tw telecom expects business fluctuations to impact sequential trends in revenue. However, it expects the full-year revenue growth rate for 2014 will be greater than 2013, "because of the consistent increase in bookings in the last four months of the year."
Shares of tw telecom were listed at $29.23, down 11 cents or 0.37 percent, in Wednesday morning trading on the Nasdaq stock exchange.
- see the earnings release
Earnings summary: Wireline telecom earnings in the fourth quarter of 2013
tw telecom extends Ethernet network to Telehouse's Manhattan data center
tw telecom joins CLEC battle against AT&T's special access proposal
tw telecom to expand metro, regional fiber network by 17 percent
Pacnet penetrates U.S. market with tw telecom E-NNI agreement
tw telecom brings fiber-based services to 30 Bay Area data centers