After a difficult second half, Inteliquent (NASDAQ:IQNT, news, filings) finished the year by beating its revised guidance quite handily, with both revenues and EBITDA for Q4 more solid than expected. However, the bigger question has been just where the company’s fortunes lie in 2013 in the wake of that December settlement with a large customer and the shift it portends in the company’s cost structure and future revenue levels. Here are the company’s results and guidance in some context:
|($ in millions)||Q4/11||Q1/12||Q2/12||Q3/12||Q4/12||FY13
|Adj. EBITDA Margin||31.7%||30.2%||27.1%||25.1%||21.4%|
|Earnings per share||0.19||0.21||0.12||(0.09)||(2.76)|
The brightest spot was clearly in Ethernet, where Inteliquent seems to be starting to ramp revenues nicely. IP transit revenues managed to recover most of the ground lost last quarter, and thus the company’s data products did quite well. Overall data traffic in the fourth quarter surged by 42% over the same period last year.
Voice declined sequentially, but less than expected – but forward guidance suggests further declines are head. Clearly the pressure on the voice business means margins will be dented materially, but there seems yet to be room for Inteliquent to find its footing at a new level in the voice business.
The large loss per share was mostly a one time write-off of $88.7M in goodwill and intangibles that derived from the Tinet acquisition.
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