Cogent Communications (NASDAQ:CCOI, news, filings) took a rather public hit back in January when filesharing giant MegaUpload was shut down by an international law enforcement action, but the company was undaunted enough to take the opportunity to declare a quarterly dividend of $0.10 for its shareholders as part of its report today. Here’s a quick summary of their results for the first quarter.
|$ in millions||Q1/11||Q2/11||Q3/11||Q4/11||Q1/12|
|Earnings per share||-0.01||0.05||0.01||0.12||-0.05|
|Adj. EBITDA Margin||33.0%||33.6%||34.5%||35.2%||29.3%|
As MegaUpload accounted for 5.5% of revenues, the sequential decline was as anticipated – helped a bit further along by some negative currency effects. A bitter pill, certainly, but at least it got swallowed all at once. But it was the EBITDA number that took the biggest hit, dropping 19% sequentially – rather more than I had expected. I supposed I should have anticipated a delay in Cogent’s ability to offset the surprise loss of that revenue. Earnings per share and margins tumbled similarly of course.
Cogent’s headcount went down as well, clearly they have been working to bring SG&A back in line. On-net buildings expanded by another 25, which is where I thought they’d probably be this quarter.
As for that dividend, Cogent has been trying to find things to do with its extra cash for some time now. Returning it to shareholders via a quarterly dividend had been on the list of course, and now the first such payment will happen on September 15.
Cogent’s stock has done remarkably well lately despite the short term trend, which has had me wondering whether the company might be in play for some consolidation. I haven’t heard any actual activity on that front though.
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