Internet provider Cogent Communications (NASDAQ:CCOI, news, filings) saw traffic growth of 24.9% from the third to the fourth quarter this year, according to their Q4 earnings release. Cogent’s lack of traffic growth earlier this year seemed to give us some advance warning that all was not right with the economy, but it seems that was a mirage. Actually, their traffic growth apparently relates mostly to its own sales dynamics. Traffic slowed as they faced pricing competition in the first half of the year, then surged when their own price cuts took hold.
Revenues of $54.9M were just barely up from Q3’s $54.6M. But like Level 3 and Global Crossing, Cogent saw a negative effect from foreign exchange of over $2.2M. EBITDA checked in at $14.7M. Everything matched guidance precisely. Not including the big $47.8M windfall from buying back their convertible debt on the cheap, they lost $8M or $0.17 per share.
For 2009 guidance, Cogent expects revenues of above $250M, EBITDA of $75-80M, and diluted EPS of $(0.15)-$(0.20). While 16+% growth is tame for Cogent compared to the last few years, it is still a healthy number is a bad economy and it seems to exceed the expectations of the street. At least someone gave some gutsy guidance this quarter, good luck to them.
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