The rough patch at Inteliquent (NASDAQ:IQNT, news, filings) got rougher today with their Q3 report, offering a bit of insight into the recent management upheaval. Revenues and EBITDA came in light, and earnings took a $9M charge amidships from a voice termination settlement with one of their major voice customers that also shifted the overall relationship. As a result, full year 2012 guidance was reduced again. Here's the birds eye view:
|($ in millions)||Q3/11||Q4/11||Q1/12||Q2/12||Q3/12||FY12
|Adj. EBITDA Margin||31.2%||31.7%||30.2%||27.1%||25.1%|
|Earnings per share||0.18||0.19||0.21||0.12||(0.09)|
Inteliquent is now putting out a bunch more operational data with its earnings report offering greater insight into the pieces of its business. This quarter, the main takeaway was that IP transit revenues took a substantial hit from pricing pressure, which took the company's average price per Mbps down by more than 10% sequentially. A solid updraft from Ethernet was not enough to compensate. They regained a bit of the voice revenues lost last quarter, but not as much as they probably hoped for.
And Inteliquent gave up on its Cisco-based Hosted UCS product line entirely during the quarter, discontinuing the effort and recording a $1.8M charge. That effort was aimed at differentiating the company's offerings and finding complementary lines of business, but apparently it just didn't work out.
Which all begs the question, where to now? I speculated last month that the company might wind up as an M&A target and I'm leaning further in that direction now.
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