EarthLink Inc. (ELNK, Financial) filed Quarterly Report for the period ended 2011-09-30.
Earthlink Inc. has a market cap of $752.2 million; its shares were traded at around $6.98 with a P/E ratio of 11.2 and P/S ratio of 1.2. The dividend yield of Earthlink Inc. stocks is 2.9%. Earthlink Inc. had an annual average earning growth of 15.4% over the past 5 years.
Our monthly consumer subscriber churn rates decreased from 3.1% during the three and nine months ended September 30, 2010 to 2.7% during the three and nine months ended September 30, 2011, which moderated the decline in average consumer subscribers. Churn rates decreased due to the increased tenure of our subscriber base. We expect our consumer access and service subscriber base and revenues to continue to decrease due to limited sales and marketing activities, competitive pressures and the continued maturation of the market for narrowband Internet access. However, we expect the rate of churn and revenue decline to continue to decelerate as our customer base becomes longer tenured and churn rates go down. Consistent with trends in the Internet access industry, we expect the mix of our consumer access subscriber base to continue to shift from narrowband access to broadband access customers.
The increase in Business Services cost of revenues compared to the prior year periods were primarily due to the inclusion of $115.2 million and $285.8 million of cost of revenues during the three and nine months ended September 30, 2011, respectively, generated from the acquired businesses of ITC^DeltaCom, One Communications and STS Telecom. Partially offsetting this was a decrease in cost of revenues resulting from network cost efficiencies and a decline in web hosting accounts and business Internet access customers.
The increase in selling, general and administrative expenses compared to the prior year periods was due to the inclusion of $73.1 million and $187.7 million of selling, general and administrative expenses during the three and nine months ended September 30, 2011, respectively, from the acquired businesses of ITC^DeltaCom, and One Communications and STS Telecom . Partially offsetting this was a decrease in selling, general and administrative expenses in our Consumer Services segment consisting of decreases in personnel-related costs, outsourced labor, advertising expense, bad debt and payment processing fees and legal and professional fees. The decreases resulted from reduced headcount and continued cost reduction initiatives, reduced discretionary sales and marketing spend, and continued benefits as our overall consumer subscriber base has decreased and become longer tenured. Longer tenured customers have a lower frequency of non-payment and require less customer service and technical support.
The increase in cash flows from investing activities was primarily due to a change in cash associated with investments in marketable securities. During the nine months ended September 30, 2010, we used cash of $252.5 million for purchases of investments in marketable securities, net of sales and maturities, as we invested some of our excess cash in longer term marketable securities. During the nine months ended September 30, 2011, we received cash of $319.7 million for sales and maturities of investments in marketable securities as we converted our investments to cash equivalents during the period. The overall increase in cash flows from investing activities was offset by a $40.1 million increase in cash used for acquisitions, net of cash acquired, and a $62.2 million increase in capital expenditures, primarily due to the inclusion of capital expenditures of our acquired companies, network and technology center related projects and customer acquisition costs. We continue to focus on investment in our technology infrastructure to support our long-term strategic plans.
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Earthlink Inc. has a market cap of $752.2 million; its shares were traded at around $6.98 with a P/E ratio of 11.2 and P/S ratio of 1.2. The dividend yield of Earthlink Inc. stocks is 2.9%. Earthlink Inc. had an annual average earning growth of 15.4% over the past 5 years.
Highlight of Business Operations:
The increases in Business Services revenue compared to the prior year periods were primarily due to the inclusion of $234.7 million and $580.1 million of revenues during the three and nine months ended September 30, 2011, respectively, generated from the acquired businesses of ITC^DeltaCom, One Communications and STS Telecom. This was partially offset by declining business demand and competitive pricing pressures for our web hosting services and business Internet access services.Our monthly consumer subscriber churn rates decreased from 3.1% during the three and nine months ended September 30, 2010 to 2.7% during the three and nine months ended September 30, 2011, which moderated the decline in average consumer subscribers. Churn rates decreased due to the increased tenure of our subscriber base. We expect our consumer access and service subscriber base and revenues to continue to decrease due to limited sales and marketing activities, competitive pressures and the continued maturation of the market for narrowband Internet access. However, we expect the rate of churn and revenue decline to continue to decelerate as our customer base becomes longer tenured and churn rates go down. Consistent with trends in the Internet access industry, we expect the mix of our consumer access subscriber base to continue to shift from narrowband access to broadband access customers.
The increase in Business Services cost of revenues compared to the prior year periods were primarily due to the inclusion of $115.2 million and $285.8 million of cost of revenues during the three and nine months ended September 30, 2011, respectively, generated from the acquired businesses of ITC^DeltaCom, One Communications and STS Telecom. Partially offsetting this was a decrease in cost of revenues resulting from network cost efficiencies and a decline in web hosting accounts and business Internet access customers.
The increase in selling, general and administrative expenses compared to the prior year periods was due to the inclusion of $73.1 million and $187.7 million of selling, general and administrative expenses during the three and nine months ended September 30, 2011, respectively, from the acquired businesses of ITC^DeltaCom, and One Communications and STS Telecom . Partially offsetting this was a decrease in selling, general and administrative expenses in our Consumer Services segment consisting of decreases in personnel-related costs, outsourced labor, advertising expense, bad debt and payment processing fees and legal and professional fees. The decreases resulted from reduced headcount and continued cost reduction initiatives, reduced discretionary sales and marketing spend, and continued benefits as our overall consumer subscriber base has decreased and become longer tenured. Longer tenured customers have a lower frequency of non-payment and require less customer service and technical support.
The increase in cash flows from investing activities was primarily due to a change in cash associated with investments in marketable securities. During the nine months ended September 30, 2010, we used cash of $252.5 million for purchases of investments in marketable securities, net of sales and maturities, as we invested some of our excess cash in longer term marketable securities. During the nine months ended September 30, 2011, we received cash of $319.7 million for sales and maturities of investments in marketable securities as we converted our investments to cash equivalents during the period. The overall increase in cash flows from investing activities was offset by a $40.1 million increase in cash used for acquisitions, net of cash acquired, and a $62.2 million increase in capital expenditures, primarily due to the inclusion of capital expenditures of our acquired companies, network and technology center related projects and customer acquisition costs. We continue to focus on investment in our technology infrastructure to support our long-term strategic plans.
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