4% Sequential Growth For Neutral Tandem

May 10th, 2011 by · 3 Comments

tndm reported earnings this morning, posting revenues of $66.4M that easily surpassed composite analyst estimates while earnings per share came in on target at $0.24.  I'll be keeping closer track of Neutral Tandem given the fact that they now own and operate Tinet and its international backbone, and with their EtherCloud and other plans they seem to be evolving into a more complicated company.  More on that after a quick table of results:

(in millions ex per share data) Q4/10 Q1/11 FY11 Guidance
- Tinet 16.1 15.7
- Voice 47.7 50.7
Revenue 63.8 66.4 256-268
Adj. EBITDA 22.8 24.2 91-95
Earnings per share 0.18 0.24
Billed Minutes 29.9 31.7 130-137
Capex 8.8 5.6 20-24

I do wish they broke out the revenue by segments, as in their guidance they did give percentages for IP, Ethernet, and Voice.  Perhaps that will be covered on the conference call.  [EDIT: It was, I have added the revenue breakdown.]

This is the company's first report with its new CEO Ed Evans at the helm.  Going forward, he had these comments:

Over the next quarter, we will continue working to enhance the strategic direction of the business. My goal is to continue to build on the great work that has been completed to date and to identify new ways to grow our company both organically as well as through innovation and M&A opportunities.

Hmmm, I hadn't put much thought into Neutral Tandem buying something at this stage, what might they go after?  Probably not fiber, as Tinet operates its backbone off of leased waves and such and it would cost too much to delve deeply enough into fiber to matter.  But what might make sense would be something having to do with managed network services in the financial vertical.  That might work well in conjunction with the EtherCloud and with the company's global presence.  Another thought is that a CDN like EdgeCast might fit the bill, since it already has that partner with carriers angle in place.

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Categories: Ethernet · Financials · Internet Backbones · VoIP

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