RCN Business (NASDAQ:RCNI, news, filings) reported earnings yesterday, and while I don't follow the consumer side of their business they do break out the financials of their metro fiber arm RCN Metro. That means RCN's report gives us a glimpse into how the ugly economic environment is really affecting the metro fiber business. Level 3 of course has piles of metro fiber and reported last week, but their operations are so diverse that it is difficult to distill such details. RCN Metro said back in March that the recession was not causing them problems, so did the numbers reflect that?
Pretty much, yes. Revenues of $45.5M were up sequentially from $44.9M, a growth rate which isn't terribly special on its own but which certainly manages to defy the current atmosphere of revenue pressure. EBITDA of $14.5M was also up sequentially, and EBITDA margins rose an impressive 200 basis points to 31.8%. Capital expenditures rose to $7.6M from $7.4M in the fourth quarter, largely ignoring the capex freezing frenzy that has spread throughout the telecom world. Along with that steady performance came another contract in the financial industry, providing CAL Financial with carrier Ethernet services.
Hopefully, this foreshadows a similar level of vitality from the rest of the sector. Later this week we hear from Cogent Communications (NASDAQ:CCOI, news, filings), and next week from the largest and steadiest competitive metro provider TW Telecom (NASDAQ:TWTC, news, filings) and for the first time in almost a decade abvt. Not only is Abovenet holding an analyst conference call, their stock will be listed on the NYSE next Tuesday - marking an end to an era.
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