Abovenet Surges Effortlessly Past Estimates

May 9th, 2012 by · 5 Comments

For what is likely their last earnings report before the merger with Zayo closes, Bill LaPerch and his crew turned in a big growth quarter.  Revenues were up strongly across all segments and 5% sequentially overall, easily besting composite analyst projections.  Earnings per share were in-line with estimates, and margins and capex were all right on target with guidance.  Here’s a quick table of their results in context:

$ in millions Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 FY2012
– Domestic metro 31.4 32.1 32.7 33.3  35.2
– Domestic WAN 23.6 25.7 26.9 28.8  30.1
– Domestic fiber 45.1 45.3 45.8 45.9  46.5
– Europe 10.6 11.1 11.4 11.8  12.6
Revenue 114.4 118.3 118.2 121.6  127.7  $515-525
Adj. EBITDA 51.5 54.0 56.4 55.9 58.5
EBITDA Margin 45.0% 45.6% 47.7% 46.0%  45.8%  ~46%
Capex 31.1 37.3 40.2 39.2  41.2  $155-165
EPS (diluted) 0.54 0.60 0.67 0.90  0.68

With the merger pending, they won’t be holding a call and thus we aren’t going to get much color.  Take a good look at those numbers, because once AboveNet’s assets go private the possible metro fiber plays available to the average investor will have dwindled substantially.  But it’s their own fault for not respecting the company’s value proposition as highly as private equity.  Maybe we’ll get lucky and Zayo will finally go public next year…

In parallel, AboveNet and ancotel announced that AboveNet will be leveraging the vmmr.® platform at ancotel’s flagship Kleyer90 facility to help power its Ethernet expansion in Europe.  AboveNet has been assembling its core infrastructure in Frankfurt even moreso than its other continental European expansion markets, which reflects its status as the largest hub in Western Europe.

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Categories: Financials · Metro fiber

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