SureWest Communications reported that year-over-year revenues increased 3 percent to $61.1 million, driven by growth in both residential broadband and business services, including mobile backhaul.

Net income for the quarter was $1.4 million, compared with a loss of $211,000 in the same period last year.

Broadband business revenues grew 20 percent compared with the year-ago quarter, while in broadband residential, SureWest achieved a 4 percent increase in both ARPU and RGUs. The company said the residential results were sparked by customer demand for its new advanced digital TV product in its Sacramento market and by continued success in migrating telecom customers to VoIP.

Steve Oldham, SureWest's president and chief executive officer, said, "The momentum of the last several quarters is continuing, as we are reaping the benefits of investments made in our network-based facilities over the last several years and the leveling off of declines in the telecom segment.

"Additionally, I am pleased that new revenue-generating opportunities over our fiber networks have exceeded our expectations," Oldham continued. "For example, our current efforts to secure additional wireless carrier backhaul contracts have proven very successful. We now have agreements in place for over 300 wireless sites, with 100 additional sites in negotiation. We will continue to take advantage of opportunities to meet customer demand for enhanced residential and business services."

During the quarter, the company went through with the layoff it had announced previously of 60 employees. SureWest expects that will lead to an estimated annualized savings of more than $6 million. The company said it will continue with cost-saving initiatives, such as the consolidation of office space.

Capital expenditures totaled $12.9 million for the third quarter and $39.3 million for the nine months ended Sept. 30, compared with $43.4 million for the first nine months of 2009. The company is reiterating projected 2010 capital expenditures of $50 million to $55 million.

Capital spending for 2011 is estimated to be $60 million to $70 million. SureWest said it expects to allocate 2011 capital to increase residential fiber-marketable homes in Kansas City. The existing Kansas City HFC network has 40 percent penetration, and the 11,600 new fiber homes passed in late 2008 and 2009 have already reached 33 percent penetration.

Approximately 25 percent of 2011 expenditures are planned for network expansion, and more than 55 percent are for success-based investment. The company also mentioned a possible data center expansion.