TW Telecom (NASDAQ:TWTC, news, filings) reported Q4 and full year 2008 earnings yesterday, and lo and behold the sky didn't fall there either. In fact, the company managed to grow revenues sequentially to $294.6M, up $3M in the fourth quarter despite the economic headwinds. Revenue growth came almost entirely from Data and Internet Services. EBITDA of $104.2M was also up sequentially, with modified EBITDA margins increasing again to 35.4%. Earnings per share of $0.03 showed no deterioration either.
Now I wouldn't call these blockbuster earnings, but they are quite solid despite the rest of the economy crumbling around us. After all, the macro economy is contracting, any growth implies relative outperformance. Churn was 1.2%, still up a bit - but to be quite honest 1.2% churn in times like these is an enviable number for an established company that serves the enterprise space. The company remains cautious about 2009, which shouldn't be news to anyone. Cautious they may be, but TW Telecom remains well positioned for this downturn. They have no maturities until 2014, a nice pile of cash, positive cashflow, and their acquisition of Xspedius has been fully integrated. Whatever 2009 throws at them, they won't be caught unprepared.
I continue to believe that TW Telecom may be active in M&A, even in this market. Of course, without access to the capital markets it will be difficult for them to do anything large without help. Their natural targets would be XO Holdings (news, filings) and perhaps the metro division of RCN Business (NASDAQ:RCNI, news, filings), although I could see them taking a swing at abvt as well. After all, with valuations low, those with the means can take advantage.
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