Nearly all the fourth quarter data is in now, so it's time to take another look at some of the metrics for companies in the sector side by side. I have added fourth quarter data for two additional companies to the usual competitive mix: newly independent Lumos Networks (NASDAQ:LMOS, news, filings) and the increasingly hybridized ILEC/CLEC Windstream (NYSE:WIN, news, filings) (pro forma). Today let's look at a plot of ebitda margin trends over time:
Adjusted EBITDA Margin for Competitive Network Operators
Most trends continue with minor amounts of noise, although it is easy to see the initial drag on margins for Level 3 from the Global Crossing deal - integration will bring that back up over time. Zayo and Cogent continued to march upward, while AboveNet and tw telecom have simply maintained their existing levels for some time, and Sprint continues their slow slide. CBeyond's preliminary results show a nice margin boost, not that they get much credit for it currently.
Lumos and Windstream both check in with quite high EBITDA margins, which derives in part from the RLEC sides of their businesses. PAETEC in particular had EBITDA margins in the teens, but the other side of Windstream offsets this in a big way. Lumos's competitive EBITDA margins are actually quite, err, competitive, and their RLEC business is smaller in comparison. I've decided to draw the line at anything wireline, but not wireless (which is why Sprint's numbers aren't their overall results). Other companies may qualify for this list, but they take time to add so be patient.
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