Vonage reported results for the second quarter of 2006, and they were not pretty. In its first earnings report since going public (May 2006), Vonage reported a loss of $74.1 million ($1.16 a share) versus $63.6 million a year ago.

Sales came in at $143 million, versus $59.4 million in the second quarter of 2005. That all seems good right? Except those numbers missed analyst expectations of around $148 million. Worse news: the company indicated that its 2006 sales will be in $600-to-$615 million, versus analyst expectations of around $636.5 million. More troubling – churn is up to 2.3% versus 2.1% in the first quarter of 2006.

In 2005, Vonage spent nearly $414 million in advertising to gain market traction, according to AdAge. Makes you wonder how much it will have to spend more in 2006 to keep the momentum going. It will have to – it needs to find new subscribers to handle that churn situation properly and show growth across the board.

There was some good news – the number of net new subscribers came in ahead of analyst expectations – 255,936. The company now has 1.85 million subscribers. In other words, the company needs to add about 450,000 or new subscribers to meet its lowered 2006 target of 2.3 million.

Vonage which is down nearly 60% from its IPO price of $17 a share, is heading south again. Why? Company says it will fall short of previously predicted number of subscribers as well – about 2.3 million versus previous expectations of 2.45 million. Who wants to bet that meeting lowered expectations would be tough, now that the cable Goliath Comcast has joined the cable VoIP party? It already has over 700,000 subscribers. Things are going to get ugly… but then you already knew that!