SureWest Income Rises on Broadband Services Sales

Broadband services pioneer SureWest Communcations on Monday announced a 7 percent rise in earnings for the second quarter as compared with the same quarter a year ago, with services such as video and Internet more than accounting for a drop in traditional telecom sales.

The company, which has already rolled out IPTV and 50mbps symmetric Internet access across its fiber-to-the-home network in northern California, posted a net income of $1.5 million for the quarter versus $1.4 million in 2006.

Total revenue from telecom services dropped 3 percent over the same period, but were more than made up for by a 14 percent rise in broadband services revenue. The wireless sector showed zero growth, according to the company.

Overall, total operating revenue were up 2 percent to $52.43 million as compared to $51.36 million for the second quarter of last year.

Consolidated capital expenditures totaled $12.1 million for the second quarter of 2007, a 2 percent drop from the prior year. SureWest said it continues to focus its capital expenditures on its targeted network build and on success based capital associated with increased penetration and ARPU on the existing network. Capital expenditures in 2007 are expected to be approximately $55 million, in line with year 2006.

On Feb. 28, SureWest closed a transaction selling its directory publishing subsidiary to GateHouse Media Inc. Under the agreement, GateHouse Media acquired 100 percent of the stock of SureWest Directories, a wholly owned subsidiary of SureWest Communications, for $110.1 million.

GateHouse Media became the publisher of the official directory of SureWest Telephone.

An after-tax gain of $60.2 million was recorded in the first quarter of 2007. First quarter and subsequent quarterly financial statements are adjusted to reflect the impact of discontinued operations.

SureWest Communications www.surewest.com

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