EarthLink's Share Price Falls

By Josh Long

Shares of EarthLink Inc. slid Thursday after the company reported its fourth-quarter earnings and gave its guidance for 2012.

The stock was trading at $7.59 as of 2:53 p.m. ET, down 49 cents or roughly 6 percent, on the NASDAQ.

The telecommunications provider reported another profit ($4.2 million or $0.04 per share) in the fourth quarter but Wall Street may have been concerned over EarthLink’s guidance for this year.

The company is projecting adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $285 million – $295 million. That’s well short of Wall Street’s consensus of $328.8 million, according to Forbes Magazine.

EarthLink is anticipating total net income for the year of $3 million to $10 million. That would be significantly less than EarthLink’s net income last year.

For the 2011 year, EarthLink reported a profit of $34.6 million, or $0.32 per share, on revenues of $1.31 billion. That compares to 2010 net income of $81.5 million, or $0.74 per share, on revenues of $622.2 million.

EarthLink posted fourth-quarter revenues of $350.2 million. That’s more than double from the year-ago period ($166.8 million) thanks to a series of acquisitions that have helped transform EarthLink from a consumer-oriented Internet provider to a business-focused communications company.

“We have made significant progress in EarthLink’s continuing transformation to an enterprise IT services company,” EarthLink Chairman and Chief Executive Officer Rolla P. Huff said in a statement. “During the fourth quarter, we again delivered solid Adjusted EBITDA and operating cash flow, while continuing to execute on our integration plans. In December, we launched our EarthLink Complete nationwide data, cloud based security, and hosted voice offering. In 2012, we intend to further expand our IT cloud services. We believe we are on a trajectory to show quarterly sequential growth in our business segment revenues as we exit this year.”