Thinking about Akamai's Q3 Report

October 30th, 2008

Content Delivery heavyweight Akamai reports Q3 earnings today after the market close.  The CDN market has been quite an interesting place this year, with literally dozens of upstarts raising money and building out competing products, lawsuits clouding the skies, P2P going in and out of fashion, and a half dozen network operators jockeying for pole position.  Through it all, the only company that really matters [Read more →]

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Thejuice's LVLT Post-Q3 Model Update

October 30th, 2008

Ok, here's the model with Q3 results and Q4/YE estimates.  As I indicated on the IV board, generally speaking the numbers were real, no gimmicks, but they were a bit light in terms new growth in CSR's as well as improvement in working capital.  Neither of these should be a surprise considering the current environment; I just was a wee bit too [Read more →]

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Savvis Solid When It Counts

October 29th, 2008

Colocation and hosting provider Savvis (SVVS) reported earnings today, with some rare good news.  Revenues of $218.4M were up 3% sequentially as expected, adjusted EBITDA of $47.7M was likewise solid, and the loss per share of 0.01 was better than anticipated.  Current 2008 guidance was reaffirmed despite the economic climate, and overall the results were perhaps Savvis's best quarter in some time.  But more important in the near term was what the company said about its financial vertical. [Read more →]

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Switch & Data Also Unshaken

October 29th, 2008

As with Equinix last week, datacenter specialist Switch & Data reported earnings Tuesday and didn't even blink in these difficult times.  Revenues of $44.1M and EBITDA of $14.0M were in-line with guidance, and EPS of $0.00 was lower because costs were a bit higher than in past quarters as expected due to the rollout of new datacenters in advance of revenue derived from them. [Read more →]

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Market Valuations for LVLT, CCOI, TWTC

October 29th, 2008

Here's something new to keep you busy.  This spreadsheet tracks various valuation metrics for LVLT, CCOI and TWTC.  I get real-time bond pricing from http://cxa.marketwatch.com/finra/MarketData/Default.aspx and stock quotes from www.yahoo.com.  For each firm there are aspects of their capital structure that are not traded thus there is no market price.  Feel free to put whatever number you want in for those.  I have them at 100% because they would be first in line in case of BK.  Also note that an entire [Read more →]

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DuPont Fabros Pulls the Plug in Santa Clara

October 28th, 2008

Well, it had to happen sooner or later. Today DuPont Fabros (DFT) suspended construction on a new datacenter project in Santa Clara.  They had needed some $300-400M to fund the project, but were only able to raise $100M from a syndicate led by Keybank.  Instead, they will use those funds to [Read more →]

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Cox Rolls Its Own Cell Network

October 28th, 2008

Apparently unwilling to wait for WiMAX, Cox Communications is going to build its own 3G cell network, in-region.  Out of region, they will strike a deal with Sprint-Nextel, and they are apparently planning to trial LTE.  By contrast, Comcast seems to be planning WiMAX femtocells in a partnership with Clearwire.  Cox's move seems to put them on a quite different path. [Read more →]

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Switch & Data Q3 Preview

October 28th, 2008

Colocation provider Switch & Data (SDXC) reports earnings on Tuesday after the market closes, following on the heels of Equinix's solid report.  Switch & Data, which went public in an IPO in the first quarter of 2007, operates some 34 carrier neutral datacenters in 23 markets in North America, and like Equinix has been investing heavily in new datacenter space.  Will they be forced to slow down their buildouts because of the economy?  Let's [Read more →]

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Verizon Checks In

October 27th, 2008

Verizon (VZ) reported earnings today, checking in with $24.8B in revenues and its usual billions of dollars of cashflow.  Adjusted EPS of $0.66 seems to have been what the market was expecting.  While the company didn't discuss the effects of the overall economy directly in their press release, no doubt they will say more at their CC later this morning.  But for now, if we didn't already know the world was ending, it sure wouldn't be apparent from Verizon's earnings. [Read more →]

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CenturyTel Buying Embarq!

October 27th, 2008

CenturyTel (CTL) is buying Embarq (EQ).  Apparently the M&A market in telecom isn't quite dead!  In this case though, it's a bit odd to think about CTL as the buyer since it is the smaller of the two.  Embarq's revenue hovers at $6.3B, whereas CenturyTel is in the $2.6B range.  Indeed, CenturyTel shareholders would own only 35% of the combined company if the merger does in fact happen. [Read more →]

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Fiber-Based Telecom Valuation Still Falling

October 26th, 2008

Two weeks ago, I looked at the new valuations of nextgen facilities-based telecoms, and it seemed that the markets had decided on an enterprise value to EBITDA ratio of roughly 5-6.  Well, the market apparently wasn't done.  While only LVLT has reported, the market has continued to devalue the sector indiscriminately.  So let's take a look at [Read more →]

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Rackspace and the Cloud

October 24th, 2008

Hosting specialist Rackspace (RAX) made a move on the cloud space this week.  And it wasn't a feint, it was a pretty substantial step.  Rackspace bought two cloud-based companies, Slicehost and Jungle Disk, and established partnerships with Limelight and Sonian.  There was quite a bit of talk on the subject in the blogosphere, but what [Read more →]

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Level 3 Leans Into the Wind

October 23rd, 2008

Level 3 Communications (LVLT) reported earnings this morning, with mixed results.  Communications EBITDA was $257M, above the expectations of many, a feat accomplished with continued impressive cost savings.  Good thing too, because revenue growth continued to lag a bit, with total revenues of $1.070B, and core revenues of $964M.  Free cash flow was $-4M, or basically neutral.  Comparing with my estimates in yesterday's primer, I wasn't too far off. [Read more →]

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Equinix Unshaken

October 23rd, 2008

Datacenter specialist Equinix (EQIX) reported earnings today, and the results were as muscular as past quarters.  Comparing with guidance as discussed in my earnings preview post the other day, revenues were solid at $183.7M and EBITDA exceeded guidance at $77M.  Gross margins of 62% and EPS of 0.19 were both good numbers as well.  Full year projections were narrowed within the current ranges.  Capex was [Read more →]

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AT&T Sells Too Many iPhones

October 22nd, 2008

That's what the media is reporting this morning.  That's what this economic crisis has done to our minds.  AT&T reported earnings this morning, and they apparently missed on the profit number because iPhone sales - which are subsidized - were substantially higher than expected, and the headlines of course focus on the miss.  Does the market really believe that [Read more →]

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Level 3 Q3 Earnings Primer

October 22nd, 2008

Level 3 Communications (LVLT) reports earnings Thursday morning, the first US nextgen carrier to do so.  And when they do, the first thing everyone is going to look for is evidence of economic deterioration.  LVLT's business has many units and their earnings reports can be rather [Read more →]

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Infinera Posts Solid Q3 Numbers

October 22nd, 2008

Telecom equipment provider Infinera (INFN) reported earnings this afternoon, beating estimates.  Adjusted GAAP revenue of $80.9M was above the range of $75-80M given in Q3 guidance.  Gross margins of 42% were on the low end due to one time effects from their rollout at Deutsche Telecom, where a migration from legacy DWDM to PICs is now complete.  Infinera added 5 new customers in addition to DT and began shipping their ILS2 systems in August.  And what about the effects of the economy? [Read more →]

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Equinix On Deck for Q3

October 21st, 2008

On Wednesday after the market closes, datacenter provider Equinix (EQIX) will report earnings and once again will give us an initial look at the rest of the sector.  If you recall, last quarter Equinix had one of the strongest quarters in the internet infrastructure sector, beating estimates handily and increasing its 2008 guidance.  Indeed, the colocation space has been on a tear all year, with most participants being well funded and engaging in massive buildouts to meet a raging [Read more →]

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Infinera: Q3 Earnings Preview

October 20th, 2008

Upstart telecom equipment provider Infinera (INFN) reports earnings Tuesday after the market closes, so let's size up the situation a bit beforehand.  Back in June, Infinera pre-announced a Q2 shortfall and reduced its Q3 and FY08 guidance.  The company attributed the lowered expectations to reduced demand from carriers who were slowing buildouts, an event that now might belatedly be considered [Read more →]

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Ericsson Shrugs Off the Gloom

October 20th, 2008

Swedish network provider Ericsson reported earnings this morning, they had been expected to release earnings on Friday but apparently decided the good news just couldn't wait and checked in with revenues of SEK 49.2B.  Their earnings of SEK 2.8B included a large SEK 2B restructuring charge, but substantially [Read more →]

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No Short Form Merger for XO

October 20th, 2008

On Friday I speculated that Carl Icahn might be planning a 'short form merger' for network operator XO Communications (XOHO), as he increases his holdings to near 90%.  However, it turns out that this threshold is not as interesting as it might have otherwise been.  Back in late July, when Icahn refinanced XO's senior debt with all that convertible preferred and perpetual preferred stock, buried in the agreement was [Read more →]

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Regional Fiber Networks

October 19th, 2008

Back in the bubble, longhaul fiber was a darling of the street.  These days, the value of metro fiber gets most of the press.  But regional fiber is a middle child that gets overlooked.  If a market isn't conveniently on the route between two NFL cities, the number of on-ramps drops amazingly quickly, the alternatives to the ILEC are generally few and come from brand names that don't get heard much.  In technological terms, this fiber is akin to longhaul fiber because it covers distances greater than a metro loop would and uses basically the same gear.  But in terms of functionality, it often acts more like [Read more →]

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The Loch Ness Datacenter?

October 17th, 2008

First we had Google (GOOG) filing a patent on datacenter barges floating 3-7 miles off shore, and now we have Morgan Stanley planning a tidal power based datacenter in the far north of Scotland.  The idea of course has a familiar ring nowadays:  instead of bringing the power to the datacenter, why not bring the datacenter to the power?  And you have to hand it to the [Read more →]

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