SureWest added revenue-generating units, increased revenue and margins, and reduced spending, but it still swung to a loss and ended up having to lay off 60 employees as a measure to get future results in line.

The company reported a second-quarter loss of $527,000, compared with a gain in the similar quarter a year ago of $959,000. Broadband revenues increased 7 percent year-over-year and accounted for 71 percent of the company's total revenues, compared with 66 percent in the second quarter of 2009, the company reported.

SureWest's second quarter was the first full quarter during which it offered its new advanced digital TV service. With the new service, the company added 1,700 net video RGUs, compared with a loss of 500 in the immediately preceding first quarter.

Steve Oldham, SureWest's president and chief executive officer, said: "Our second-quarter results demonstrated our ability to create growth in both business and residential markets with reduced year-to-date capital expenditures. We remain focused on growing revenues, margins and free cash flow through increases in our commercial service offerings and residential triple-play growth, while continuing our cost-saving initiatives."

The company said it is finding some success with wireless backhaul, as well, working with three major carriers to provide wireless backhaul service to more than 200 cell sites; it said it is negotiating to add 100 more sites.

Oldham said, "These backhaul projects set the stage for future growth on recurring revenue streams and can be delivered quickly and cost-efficiently due to our high-capacity networks and proximity to cellular sites."

Capital expenditures totaled $13.9 million for the second quarter and $26.4 million for the six months ended June 30, compared with $29.5 million for the first six months of 2009. The company said it is lowering projected 2010 capital expenditures from $55-$60 million to $50-$55 million "due to a more selective success-based capital plan and a reduction in core maintenance expenditures." The 2010 capital plan remains aimed at increasing commercial growth and residential RGUs, with approximately two-thirds of expenditures for success-based investment.

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