Ok, I had a call with IR and had a chance to ask many questions. Consequently I have updated my model. For those that follow this ongoing effort you will note that I have brought down my EBITDA number.  Here is the spreadsheet:

On this I would point out a few mistakes I made in the last version and whose corrections are reflected in my new projections:

1. SGA falls in Q4 NOT Q3 (when pricing for ulitity bills etc comes down)
2. Increases in GM on CNS base will be a function of when we shut down the legacy networks, something that will happen in 09 not 08. Of course we might see a small increase, I’m going to assume <1% for the remaning portion of the year, but until we shut down Broadwing etc. we are going to be stuck around 65% GM. The low hanging fruit is done, going from 63% to 65% from Q1 to Q2….at this point we will need to wait up to a year before we see the bigger benefit associated with the final stages of the integration process.
3. My thought is that we will grow CNS 3% in Q3 and 4% in Q4. I *really* think we need to make this happen so that we can start to talk about double digit growth in CNS for FY09.

I won’t be updating anymore until a few days before Q3 numbers come out in late October.  Until then, best of luck to all.

Now What?
 Print it!
 Email it!
 Subscribe via RSS
 Subscribe via Email
 Subscribe to Comments