A week or so earlier than usual and a day and a half after its prospective acquirer did so, tw telecom posted its second quarter results. They saw revenue growth pick up a little bit over the past few quarters, moving up 2.8% sequentially and beating estimates slightly. Earnings per share seems to have been inline after excluding merger-related costs. Here are their numbers in some context:
|($ in millions)||Q2/13||Q3/13||Q4/13||Q1/14||Q2/14|
|– Data & Internet Services||220.1||226.5||235.2||243.7||253.0|
|– Network Services||64.1||61.6||60.0||58.4||56.7|
|– Voice Services||76.4||77.3||76.8||77.4||77.9|
|– Intercarrier Compensation||8.3||7.3||6.6||6.1||6.7|
|– Taxes & Fees||20.6||20.5||21.4||22.8||25.1|
|Adj. Earnings per share||0.12||0.12||0.11||0.07||0.08|
|On-net buildings added||616||566||607||523||554|
|Free Cash Flow||16.1||16.3||(34.1)||10.8||20.0|
Margins remained lower than they have been historically, which is not at all unexpected due to all the market expansion work the company has been doing for the past 8 months. Capex ticked back down below the $100M mark for the quarter, the first time we’ve seen that in a while with or without the market expansion projects. But tw telecom kept up its on-net building pace, adding 554 more during the quarter. and breaking the 21K mark.
With the Level 3 deal set to close in Q4 and I suspect possibly in October, this very well may be the last earnings report we get from tw telecom before the closing of the deal. For almost a decade we’ve almost been able to set our watches by tw telecom’s numbers and performance, as they usually chose focus and discipline over the more free-wheeling consolidation on the other side of the fence.
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