VoIP operator Vonage (NYSE: VG) reported third quarter income tripled to $24 million, or 11 cents per share, on sales of $217 million, up $3 million from a year ago.
But an increase in churn, from 2.4 percent to 2.7 percent year-over-year, threw up some red flags. The company said it added 170,000 gross lines, up from 163,000 a year earlier, but saw gross line losses almost double from a year ago to 9,000.
The company ended the quarter with 2.39 million subscriber lines, down from 2.40 million in the third quarter last year.
In an earnings call, CEO Marc Lefar said Vonage "took another step forward in transforming our business beyond traditional home phone service."
Vonage added two mobile products during the quarter that Lefar said were "striking a chord with consumers." Some 400,000 customers have either registered their mobile phone as an extension to their Vonage World plan or downloaded its "time to call" app since they launched.
Lefar said net income was in large part driven by Vonage's two debt refinancings that dropped interest rates from a high of 20 percent a year ago to less than 4 percent, resulting in a savings of $22 million year-to-date, and an anticipated $30 million by year end.
Vonage also capitalized on a 9 percent reduction in subscriber line acquisition costs from a quarter ago to $300 and on expanded distribution. The company has doubled its distribution outlets with the recent addition of Best Buy, Kmart and Sears.
For more:
- see this release
- see this earnings call transcript from Seeking Apha
Earnings summary: Wireline in the third quarter 2011
Related articles:
Vonage's 'Extensions' plan sees strong uptake from iPhone, Android users
Vonage Holdings beats analysts with Q2 earnings record
- Share
-
-
-
-
-
-
Send to a friend
-
more...
- | Post a Comment
