Yet Another Solid Quarter For tw telecom

As has been their recent practice, twtc posted its earnings after the market closed today, with their conference call scheduled for tomorrow.  Their third quarter was another of the steady steps forward in revenue, EBITDA, and margins we have come to expect every three months, meeting analyst expectations on the financials while adding another 552 on-net buildings to their network.  Here’s a tabular summary:

Data & Internet revenues were up 3.7% sequentially, offset by a 2% decline in network services, while voice held largely steady. M-EBITDA margin rose back to the 37% mark once again while earnings hit $0.14 per share.  And none of that will surprise anyone, except perhaps the return to 500+ on-net buildings added.

The recent rumors around tw telecom’s potential sale to CenturyLink  have ebbed for now, but tw’s steady progress keeps them in a position of strength when it comes to such negotiations.  They don’t need to do anything, so a buyer will need to pay a hefty multiple to get their attention.  I still like their position better as a buyer and integrator, with targets like XO and Sidera still looking quite attractive strategically.  But there is no indication they are moving in that direction.

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