Quite a few alternative metro fiber operators will likely be putting out their first quarter earnings reports this week. Here are quick previews of four of them:
tw telecom: The story this year for tw telecom is the company’s ongoing network expansion via dark fiber spanning dozens of markets across the country. It’s too early to see much from that other than capex though, so revenue should stay on its steady trajectory. Costs should be up somewhat, both from the buildout and the company’s usual seasonality, so EBITDA margins may dip – though the effect probably won’t be huge.
| ($ in millions) | Q1/13 | Q2/13 | Q3/13 | Q4/13 | Q1/14 (my guess) |
|---|---|---|---|---|---|
| – Data & Internet Services | 202.1 | 209.6 | 215.9 | 223.7 | 230 |
| – Network Services | 78.9 | 78.5 | 76.1 | 75.4 | 75 |
| – Voice Services | 92.3 | 93.1 | 93.9 | 94.3 | 95 |
| – Intercarrier Compensation | 7.9 | 8.3 | 7.3 | 6.6 | 6 |
| Total Revenue | 381.2 | 389.5 | 393.2 | 400.0 | 406 |
| M-EBITDA | 136.0 | 137.3 | 138.5 | 140.7 | 142 |
| M-EBITDA Margin | 35.7% | 35.3% | 35.2% | 35.2% | 35% |
| Adj. Earnings per share | 0.09 | 0.12 | 0.12 | 0.11 | 0.10 |
| Revenue Churn | 0.8% | 0.9% | 1.0% | 0.8% | 0.9% |
| Capital Expenditures | 90.9 | 101.0 | 102.0 | 208.0 | 110 |
| On-net buildings added | 498 | 616 | 566 | 607 | ~500 |
| Free Cash Flow | 23.9 | 16.1 | 16.3 | (34.1) | ~20 |
Cogent Communications: Cogent is making itself heard these days mostly via earnings, dividends, and stock buybacks. I expect we will hear just as much of that sort of thing this quarter. I am curious though to see where they start putting their capex as the tightly focused multi-tenant building opportunity they have specialized in starts to get more sparse in the years ahead. In Q1 they should pass the 2,000 on-net building mark at last. Another big thing to watch for of course is the company’s comments on the ongoing peering/net neutrality/Comcast/Netflix saga.
| $ in millions | Q1/13 | Q2/13 | Q3/13 | Q4/13 | Q1/14 (my guess) |
|---|---|---|---|---|---|
| – On-net | 61.7 | 62.7 | 64.5 | 66.0 | 67.5 |
| – Off-net | 22.3 | 22.6 | 22.8 | 23.4 | 24 |
| – Other | 0.6 | 0.5 | 0.4 | 0.4 | 0.4 |
| Revenue | 84.6 | 85.8 | 87.8 | 89.9 | 91.9 |
| EBITDA | 28.3 | 29.6 | 30.7 | 31.5 | 32.2 |
| Earnings per share | 0.01 | 0.03 | 0.05 | 1.10 | 0.05 |
| Gross Margin | 56.1% | 56.9% | 57.5% | 57.4% | 57-58% |
| Adj. EBITDA Margin | 33.5% | 34.5% | 35.0% | 35.0% | ~35% |
| On-net Buildings | 1890 | 1921 | 1955 | 1990 | 2015 |
Lumos Networks: Lumos has been busy investing in its network, both 0n fiber-to-the-tower and on turning those Pennsylvania assets into something more like the rest of the company’s network footprint. On the financial front lately they’ve seen their gains in strategic data offset by declines in the legacy voice and access side of their business. That trend will probably continue for another few quarters.
| $ in millions | Q1/13 | Q2/13 | Q3/13 | Q4/13 | Q1/14 (my guess) |
|---|---|---|---|---|---|
| – Strategic Data | 29.7 | 30.0 | 30.4 | 31.2 | 31.6 |
| – Legacy Voice | 14.9 | 14.3 | 14.1 | 13.3 | 13.0 |
| – Access | 8.0 | 8.0 | 7.2 | 6.5 | 6.0 |
| Revenue | 52.5 | 52.3 | 51.6 | 51.0 | 50.6 |
| Adjusted EBITDA | 24.7 | 24.6 | 23.0 | 24.0 | 23 |
| Earnings per share | 0.30 | 0.22 | 0.11 | 0.18 | 0.20 |
| Adj. EBITDA Margin | 47.0% | 46.9% | 44.6% | 47.1% | 45.5% |
| Capex | 15.0 | 11.7 | 19.0 | 22.6 | ~20 |
| On-net Buildings | 1235 | 1273 | 1303 | 1344 | ~1380 |
| On-net Cell Sites | 405 | 465 | 540 | 608 | 650-700 |
euNetworks: Over in Europe, euNetworks will be looking for a little less churn going forward in 2014 than it endured last year even as EBITDA continued to rise. Following Zayo’s purchase of Neo Telecoms, speculation on euNetworks role on either side of further Euro fiber M&A activity is likely be on the mind of many. But for Q1 I don’t expect there will be much in the way of fireworks, and the higher churn probably isn’t quite over yet.
| in millions of € | Q1/13 | Q2/13 | Q3/13 | Q4/13 | Q1/14 (my guess) |
|---|---|---|---|---|---|
| Revenue | 24.8 | 24.5 | 24.1 | 24.0 | 24.2 |
| Gross margin | 72.4% | 72.0% | 72.9% | 74.4% | ~74% |
| Adj EBITDA | 5.7 | 6.0 | 6.3 | 7.4 | 6.7 |
| Adj EBITDA margin | 23.0% | 24.5% | 26.1% | 30.8% | 27.7% |
| Capital Expenditures | 3.6 | 4.9 | 8.7 | 10.7 | 5-10 |
| Proxy Cash Flow | 2.1 | 1.1 | (2.4) | (3.3) | 0-(2) |
| Churn | 1.2% | 2.8% | 2.2% | 2.3% | ~2% |
| On-net buildings | 945 | 985 | 1,011 | 1,046 | ~1080 |
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!
Categories: Financials · Metro fiber
Our Main RSS Feed
Our LinkedIn Group
Our Facebook Page
Follow @TelcoRamblings
Peter Radizeski on T-Mobile, TPG Eyeing Uniti Group?: “With $10B in debt and a market cap of $2.5B, the problem isn’t the price (~$13.5B), it is the mess…” Apr 6, 12:12
Discuss this Post