On Thursday morning, TW Telecom (NASDAQ:TWTC, news, filings) will report its fourth quarter and full year 2011 earnings. Unlike Level 3, which reports on Wednesday and which I previewed in a post yesterday, tw telecom is not in the midst of a big internal integration project and there is not much mystery in what they're likely to say. The financial markets have been favorable to them lately, boosting their stock price above $20 again though, which suggests perhaps there will be more people watching this release than in recent quarters. Here's a quick table of my projections for tw telecom's Q4 results in the context of the past four quarters:
|($ in millions)||Q4/10||Q1/11||Q2/11||Q3/11||Q4/11
|- Data & Internet Services||145.1||152.2||158.2||164.7||171|
|- Network Services||89.5||89.5||88.9||86.9||87|
|- Voice Services||81.9||83.0||83.6||85.2||84|
|- Intercarrier Compensation||8.3||7.8||8.7||7.7||8|
|Earnings per share||0.11||0.08||0.09||0.10||0.11|
|On-net buildings added||537||512||569||561||~500|
|Free Cash Flow||26.4||26.1||16.5||23.2||20-30|
My own projections are just a tad higher than the street seems to peg them at, as I think tw is poised for a bit of acceleration and Q4 seems the likeliest time to get a hint of it. There is no indication that the macro economy is hurting the metro fiber business, and in fact there have been indications that incumbent providers have other priorities and thus there is perhaps an opportunity to gain share at present.
This quarter, tw telecom will very likely have passed the 15,000 on-net building milestone, more than 2,000 higher than at the end of last year. I will be curious to see if they keep up this pace of 500 buildings added per quarter and whether they intend to do the same in 2012. This has been a material change in their strategy over prior years that may not yet have been fully reflected in the company's rock-steady results.
That being said tw telecom has been growing very consistently with annual increases in the high single digits for some time. While it's tempting to hope they might push that into double digits this year, history says this train doesn't change speed quickly so even if there is a shift it will likely be subtle.
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