Metro Fiber Earnings: Abovenet, RCN Metro, Cogent

May 6th, 2010 by · 7 Comments

Today is a telecom earnings deluge, it’s raining fiber & data out there today.  Here is a quick summary of the more metro fiber oriented companies in the sector that reported today.

abvt had a pretty powerful Q1.  Revenues of $97.2M were ahead of expectations, and up solidly from Q4/09 numbers.  Adjusted EBITDA of $42.6M was also a strong number, yielding an adjusted EBITDA margin of 43.8% – back up into the mid 40s after a slight dip last quarter.  Abovenet’s Q4 spooked some investors, as they projected higher capex for longer term projects – however the Q1 number of $27.4M wasn’t huge.  The company maintained its guidance, pointing revenues to the higher end of the range. 

Cogent Communications (NASDAQ:CCOI, news, filings) had a solid quarter on the revenue front, checking in with $62.8M, slightly above expectations.  EBITDA of $17.5M was up just a hair over the prior quarter, but loss per share was just $0.01 – easily beating expectations.  Cogent added its usual 24 more lit buildings to its footprint, which at 1,475 will likely have hit 1,500 by the next quarterly release.  Traffic growth was just 8% above the fourth quarter, however that number does tend to jump around quite a bit so we’ll need more datapoints before saying much about it.

RCN Metro, the metro fiber division of RCN Business (NASDAQ:RCNI, news, filings), had fairly unsurprising numbers to report.  Revenues of $49.2M were up sequentially, but not by alot.  EBITDA fell slightly from the fourth quarter to $16.7M, while capital expenditures increased to $9.5M.  Barring anything unusuall, this may be the last time we hear from this company for a long while, as RCN Metro will soon be the property of private equity ABRY Partners.  According to the filings though, ABRY is separating the metro fiber business from the consumer/SME business from the start, which suggests to me that there is another shoe left to drop.

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Categories: Financials · Metro fiber

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7 Comments So Far

  • Anonymous says:

    Rob –

    Who would be interested in acquiring Abovenet? Cable company? tw telecom? Level 3? With a $1.1 billion EV, who has the capacity to acquire them (for a preimium) at this point?

    • Rob Powell says:

      The only current answer IMHO is probably TW Telecom, but frankly I don’t see Abovenet as an acquiree right now.

  • Frank A. Coluccio says:

    Given that the TCG and Worldcom metro properties were subsumed through acquisitions by AT&T and Worldcom, respectively, one might look in future to Qwest-CenturyLink as a possibility, were it not for their cultures being far apart. Or, are their cultures all that far apart as they once were?

  • Anon says:

    My .02 cents would be someone with a great LH / international asset like GBLX or Q that needs deeper reach into the metros. Paying for loop to serve enterprises is not sustainable when your competitors (att, vzb) don’t pay for it or only pay for it in certain markets

    • Rob Powell says:

      The asset fit between GLBC and ABVT is attractive and I have posted about it before actually, but I currently have trouble envisioning a price at which the two could both agree on and get funding for.

  • Dave Rusin says:

    I see AboveNet as a consolidator … not for sale … I think they would consolidate quality, not someone’s problems … Bill LaPerch CEO of AboveNet has already been through the clean-up the other guys mess routine …

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