Tucows Inc (TSX:TC) (NASDAQ:TCX) said second-quarter earnings plunged by over a third and revenue fell short as well because recent acquisitions and broadband service rollouts affected its bottom line, with Ting Mobile providing the sole source of joy in the firm's report.
The company said late Wednesday that earnings per share in the second quarter dropped to US$0.34, down 32% from the year-ago level of US$0.50 and the expectation by a single analyst it would hit US$0.52. Revenue was at US$81.1mln, almost 4% lower than the US$84.2mln in the same period a year ago and under the US$82mln expected by the same single analyst.
The revenue shortfall was due "primarily to the bulk transfer of 2.65 million very low margin domain names during the first quarter of 2018, which was partially offset by the continued growth of Ting Mobile," Tucows said in a statement.
"Ting Mobile delivered increases in year-over-year revenue and margin as we work towards the next phase of customer growth. Finally, Ting Internet continued its steady progress from network builds and expansions across the footprint to serviceable addresses, to subscriber activations, to dependable recurring monthly revenue,” said Tucows CEO Elliot Noss.
Ting Mobile's wireless network revenue went up 10% to US$22.4mln. Ting Internet revenue climbed 46% to US$1.9mln. Broadband services were recently opened in areas such as Charlottesville, Virginia, and Holly Springs, North Carolina.
Net income for the second quarter of 2018 was also affected by acquisition and transaction costs of $0.8mln, the company said
Shares of Tucows on Nasdaq fell 2.5% to US$55.35 in morning trade on Thursday, while the shares lost 4.3% to C$71.08 on the Toronto exchange.
Tucows is based in Toronto, Canada. It is a provider of network access, domain names and other Internet services.