HOLMDEL, N.J. (AP) -- Vonage Holdings Corp., a provider of Internet-based telephone services, reported a fourth-quarter net income Wednesday, boosted by a tax-related adjustment.
But adjusted profit fell short of analysts' expectations. Vonage also said it plans to increase spending this year on growth initiatives, and the company's shares slid 14 percent.
Net income in the last three months of 2011 was $350.1 million, or $1.48 a share, compared with a loss of $41.7 million, or 19 cents a share, in the last three months of 2010.
After adjusting for a tax benefit, Vonage earned 10 cents per share, 2 cents short of Wall Street's expectations but higher than the adjusted earnings of 6 cents a year ago.
Revenue was largely flat at $215.7 million, compared with $217.6 million a year ago. Analysts surveyed by FactSet were expecting $215 million.
Vonage said it planned to increase investments in areas it expects to grow, namely mobile opportunities, new territories and international calling in the U.S. Spending was expected to increase $5 million to $10 million per quarter compared with 2011 levels.
The company said that investment would pressure its profitability this year, as measured by "EBITDA." EBITDA is a profit measure that excludes interest, taxes and accounting measures that track the value of a company's assets.
Vonage said it expects $30 million to $35 million per quarter in adjusted EBITDA, down from $40 million in the fourth quarter of 2011.
Vonage, which is based in Holmdel, N.J., also said it lost 14,000 customers in the fourth quarter to end the year with 2.4 million. The company attributed some of the losses to its adoption of contract-free plans and the defection of Hispanic subscribers. But customers on average were paying more — $30.12, from $29.78 a year ago — in part because more were signing up for more expensive plans and paying more in federally mandated fees.
Vonage's stock fell 39 cents to $2.34 in midday trading Wednesday.
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