Vonage swings back to 2Q profit on lower expenses

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HOLMDEL, N.J. (AP) — Vonage Holdings Corp. lowered its expenses to deliver second-quarter earnings that were slightly better than analysts anticipated despite a decline in the Internet phone company’s revenue and customers.

The company said Wednesday that it earned $21.7 million, or 9 cents per share, during the three months ending June 30. That contrasted with a loss $562,000, or break even on a per share basis, at the same time last year.

The reversal stemmed primarily from cost cutting, including lower expenses on its debt.

If it hadn’t had to account for the early retirement of some debt, Vonage said it would have earned 10 cents per share. That figure was a penny above the average estimate among analysts polled by FactSet.

Vonage, which is based in Holmdel, expects to save another $43 million annually from a refinancing announced Wednesday.

Revenue in the second quarter was $218.3 million, a 3 percent decline from $225.3 million at the same time last year. Analysts had been expecting revenue of nearly $221 million. Part of the drop was driven by the company’s discontinuation of activation fees. That move also compressed Vonage’s average revenue per user, which fell 2 percent, or 57 cents, to $30.14 per month.

The phone service ended June with nearly 2.4 million subscribers, down nearly 10,600 accounts from the end of March. Management expects its total customers to stay in roughly the same range for the rest of the year.

Vonage shares shed 20 cents, or nearly 5 percent, to $3.52 in Wednesday’s afternoon trading.