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MindSpring's profits leap
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October 20, 1998: 7:03 p.m. ET
Internet access provider reverses year-ago loss as member base soars
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NEW YORK (CNNfn) - Net income of Internet access provider MindSpring Enterprises Inc. catapulted in the third quarter, as sharp gains in online membership and an agreement to provide high-speed Internet access over a new broadband network helped fuel record financial results.
MindSpring, which serves about 340,000 dial-up subscribers in more than 300 cities nationwide, said its third-quarter earnings rose to $3.99 million, or 15 cents a diluted share, from a loss of $627,000, or 3 cents a share, in the comparable period a year ago.
MindSpring said an amortization expense accounted for $1.2 million, or 4 cents a share, up slightly from $1.06 million, or 5 cents a share, a year earlier. First Call, an earnings-tracking agency whose estimates generally exclude amortization charges, projected earnings of 11 cents a share.
Revenue more than doubled from the year-ago quarter, rising from $13.97 million to $28.7 million, driven in part by a 16 percent surge in the company's member base from the second quarter.
MindSpring said it had about 455,000 members at the end of the third quarter, up from 393,000 in the prior quarter and 224,000 in the year-ago period.
Earlier this month, MindSpring agreed to acquire from America Online certain assets in AOL's Sprynet unit. MindSpring said it hopes to convert current Sprynet users into its own members, and expects to retain between 140,000 and 180,000 of Sprynet's customers.
During the quarter, MindSpring signed an agreement with Knology Holdings Inc., to provide high-speed Internet access using two-way cable modems to customers on Knology's advanced broadband and communication networks.
MindSpring, based in Atlanta, has grown steadily thanks in part to a determined acquisition drive, including the purchase of more than 42,000 subscribers from PSINet.
The company offers a full line of Web services, including domain registration, Real Audio, electronic mail and local Internet service in more than 375 location throughout the United States.
The company reported revenues of $52.6 million in 1997, a 190.6 percent rise from the previous year.
Shares of MindSpring (MSPG) closed up 1-5/16 at 31-1/4 Tuesday on the Nasdaq on volume of 2.1 million shares.
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Mindspring
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