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Paetec reports strong growth in revenues, earnings

Paetec reports strong growth in revenues, earnings

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Paetec Holding Corp. Thursday reported strong gains, showing a triple-digit increase in fourth-quarter earnings and double-digit leaps in revenues for the final quarter and earnings and revenues for the full year.
In the fourth quarter, Paetec posted net income of $15.5 million, up 490 percent over the $2.6 million in net income the company reported a year earlier. Revenues of $288.6 million showed a 91 percent increase over revenues of $151.5 million in the final quarter of 2006.
Full-year net income of $10.5 million was up 39 percent from $7.8 million. Paetec’s 2007 revenues of $1.04 billion showed a 78 percent increase over the company’s $586.3 million in 2006 revenues.
The company largely attributed revenue gains to dollars added by its 2007 merger with US LEC Corp. But it also cited strong sales of T-1 Internet connections and voice over Internet protocol telephone services as significant contributors.
Not reflected in the report is Paetec’s recently completed acquisition of McLeod USA Inc., which last year turned in a $46.4 million loss on revenues of $499.5 million.
The purchase of the Iowa-based competitive local exchange carrier for the first time gives Paetec coast-to-coast coverage and adds a fiber-optic network covering several states to Paetec’s infrastructure.
Combined Paetec/McLeod USA results in 2007 on a pro forma basis would have produced a $36.2 million loss on revenues of $1.6 billion, Paetec said.
Paetec stock (Nasdaq: PAET) shortly after midday was trading for $7.94 a share, down 5 cents.
Now based in Perinton, Paetec plans to build a downtown Rochester headquarters on the site currently occupied by Midtown Plaza. The company employs approximately 4,000, including some 700 in the Rochester area.

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