Earthlink: Why Haven't They Bought AOL's Dial-Up Unit?

Earthlink (ELNK) is an odd company: it continues to generate more and more cash from the terminally ill (and steadily shrinking) dial-up Internet access business. Its coffers are bursting at the seams. Judging by the company’s valuation, the Street doesn’t see a whole lot of value in the core business. But there certainly is intrigue over the cash–including whether the company will eventually buy the AOL dial-up access business.

This morning, Earthlink posted Q4 revenues of $216.1 million, right in line with the Street at $216.2 million. But the dial-up Internet access provider posted profits for the quarter of 25 cents a share, falling short of the Street by 13 cents. Note, however, that results include a $78.7 million noncash impairment charge, partially offset by a $56.1 million tax benefit. Revenues dropped 23.4 percent from a year ago.

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