TW Telecom Posts Solid Q2, Adds Yet 500+ More Buildings

August 9th, 2011 by · 1 Comment

TW Telecom (NASDAQ:TWTC, news, filings) is really picking up the pace when it comes to bringing fiber into new buildings.  According to their second quarter earnings report last night, the company added another 569 buildings to its network, giving them 14,311 in all now.  In the last twelve months, tw telecom has brought 2,035 buildings on-net, far and away the leader amongst competitive providers.  As for the financials, well as always you can set your clock by this company's numbers.  Here's a quick tabular summary in context:

($ in millions) Q2/10 Q3/10 Q4/10 Q1/11 Q2/11
- Data & Internet Services 134.1 138.8 145.1 152.2 158.2
- Network Services 90.2 90.0 89.5 89.5 88.9
- Voice Services 84.0 82.9 81.9 83.0 83.6
- Intercarrier Compensation 8.7 8.4 8.3 7.8 8.7
Total Revenue $316.8 $320.3 $324.8 $332.5 $338.4
M-EBITDA $114.4 $115.5 $119.4 $121.4 $123.2
M-EBITDA Margin 36.1% 36.1% 36.7% 36.5% 36.4%
Earnings per share 0.10 0.11 0.11 0.08 0.09
Revenue Churn 1.0% 1.1% 1.0% 1.0% 0.9%
Capital Expenditures $85.0 $77.8 $78.1 $79.3 $90.9
On-net buildings added 367 417 537 512 569
Free Cash Flow $15.2 $23.8 26.4 $26.1 $16.5

Revenues:  No surprises here, and right on target with analyst estimates.  Data and internet revenues were up 2% sequentially, while the company's network and voice services were basically flat.  In all, tw telecom is still within the single digit growth realm, reflecting its conservative bent - though perhaps the acceleration in buildings foreshadows another in the works for revenue.

EBITDA and EPS: Modified EBITDA of $123.2 was rock steady, yielding 36.4% margins.  This does seem to be the level tw telecom's assets and business model can support at this scale, as they have been in this range for some time.  Earnings per share of $0.09 was also right in line.

Cash Flows & Capex:  Here we saw a definite bump upward to $90.9M spent during the quarter on capital expenditures.  This reflects the higher rate of building additions and an increase in success-based opportunities overall.  This is the only guidance metric the company offers, but they raised capex guidance to $340-350M.  That suggests capex per quarter of $87.4M for the remainder of the year, so this wasn't a one time boost.

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Categories: Financials · Metro fiber

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