Vonage Holdings 1Q loss narrows on sales and lower costs

HOLMDEL, N.J.—Internet communications company Vonage Holdings Corp. said Thursday its first-quarter loss narrowed 88 percent on higher sales and reduced costs.

Net loss fell to $9 million, or 6 cents per share, from $72.3 million, or 47 cents per share, in the 2007 first quarter.

Sales rose 15 percent to $224.6 million from $195.9 million in 2007.

Analysts polled by Thomson Financial expected a loss of 7 cents per share on sales of $223.1 million.

Vonage said it added 30,000 subscriber lines during the quarter for a total of 2.6 million.

Operating expenses fell to $229.1 million from $269 million, including a drop in marketing costs to $60.1 million from $90.1 million.

Citigroup analyst Michael Rollins said the company had a solid quarter and maintained his "Hold" rating.

Rollins liked that the company could be about to refinance its convertible debt, which should offer a better share price. However, he remained cautious on the company's fundamental business.

Shares of the Holmdel, N.J.-based company dropped 3 cents to $1.85 in afternoon trading.

Vonage supplies equipment and service that allows users to have phone conversations over the Internet.