<p>EarthLink Inc. cited an increase in broadband customers as the much leaner Internet Service Provider posted a small profit in the fourth quarter after losing money in the year-ago period.</p><p>While the results announced Tuesday beat Wall Street expectations, EarthLinks guidance for 2004 was well below expectations. It said it expects to earn $13 million to $39 million on flat revenue for 2004. Analysts are expecting earnings of $55.29 million.</p><p>Shares of EarthLink fell $1.10, or nearly 10 percent, to close at $10 in trading on the Nasdaq Stock Market.</p><p>Atlanta-based EarthLink said it earned $10.72 million, or 7 cents a share, for the three months ending Dec. 31, compared to a loss of $36.9 million, or 24 cents a share, in the same three-month period a year ago. The prior-year loss included $4 million the company paid out in dividends to preferred shareholders.</p><p>Excluding one-time items mostly related to the closing of call centers, EarthLink said it earned $19.4 million, or 12 cents a share. On that basis, analysts surveyed by Thomson First Call were expecting earnings of 9 cents a share.</p><p>Revenues in the October-December period edged up .2 percent to $348.58 million, compared to $347.85 million a year ago.</p><p>The fourth quarter capped a highly successful 2003, said Garry Betty, EarthLinks president and chief executive officer. He said the company passed the one million broadband customer milestone and posted subscriber gains in its premium narrowband access services.</p><p>The earnings news comes on the heels of EarthLink continuing to shed its work force.</p><p>Earlier this month, the company said it is cutting another 1,300 jobs, or 40 percent of its work force, and outsourcing the work of some of its call centers to other companies as part of a major restructuring that started a year ago.</p><p>The cuts are on top of 1,300 jobs EarthLink shed in January 2003. After the cuts are completed this year, the company will have about 2,000 employees.</p><p>In both rounds of cuts, EarthLink cited increased competition. EarthLink remains third behind America Online and MSN in market share among Internet service providers. It has roughly 5 million paying subscribers.</p><p>For all of 2003, Atlanta-based EarthLink said it narrowed its loss to $66.67 million, or 42 cents a share, compared to a loss of $168.02 million, or $1.11 a share, in 2002. The results include $4.6 million paid out in dividends to preferred shareholders, compared to $20 million in 2002. Twelve-month revenue was $1.4 billion, compared to $1.36 billion in 2002.</p><p>Going forward, EarthLink said it expects to continue to add subscribers and benefit in cost savings from its reduction in workforce. But, it said revenue for 2004 is expected to be $1.41 billion to $1.44 billion, nearly the same as 2003. Analysts are expecting revenue of $1.46 billion.</p><p>___</p><p>On the Net:</p><p>HASH(0x2864e1c)</p>
