The Incredible Shrinking Sprint

November 8th, 2008
 

As I read through Sprint's earnings release on Friday, one question kept running through my mind:  "Just how long can they keep doing this?"  Every quarter, another 2-3% sequential drop in revenues as customers flee.   They're going to have to step up and fix the situation soon, else we will get to see what happens when falling revenues meet fixed costs - freefall is the pleasant part, the pain comes when you land. [Read more →]

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Colocation Helps Internap's Advance

November 8th, 2008
 

Internet solutions provider Internap(INAP) reported earnings Thursday after the market closed, showing a few signs of life again after a weak Q2 showing and an horrible 2008 so far. Revenues of were higher than generally expected, and adjusted ebitda and earnings were similarly [Read more →]

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Rackspace Rides On

November 7th, 2008
 

Wow, it's been a busy few days for the internet infrastructure sector, it seems like just about everyone yet to report earnings is trying to squeeze through the door.  Today hosting specialist Rackspace (RAX), which had the lucky timing of going public in August just before the economy fell and broke a hip, reported its third quarter numbers.  I don't yet have a great feel for this company and where they might or might not go.  On the one hand there is the older but solid hosting/colo model and on the other hand [Read more →]

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More Detail on Cogent From TheJuice

November 6th, 2008
 

Good morning all. Well Cogent (CCOI) reported this morning and there are quite a few items to discuss. First off, these guys are good traders. Although not impacted in the current financial statements it appears they have purchased back more than 50% of their debt for less than .50 cents on the dollar. Further, as we know they continued their assault on [Read more →]

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Cogent Did What?

November 6th, 2008
 

Cogent Communications (CCOI) reported earnings today, and it was quite a show - a variety show.  You know, the kind where there is some amazing stuff and also some other stuff you wish stayed behind the curtain.  So after reviewing thejuice's primer let's look at the usual figures first:  Revenues of $54.6M were perhaps a tad light but roughly as expected.  However adjusted EBITDA was weaker than anticipated at $14.2M, due to [Read more →]

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Global Crossing Keeps Climbing

November 6th, 2008
 

In late September, during the height of the fear of financial armageddon, the international telecom operator Global Crossing gave presentations at several investor conferences.  To disbelieving ears, they said that their growth trends were intact, and while they had been monitoring the situation watching for weakness they saw no disaster around the corner for their business.  The market decided they must be [Read more →]

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TW Telecom Muscles On

November 6th, 2008
 

TW Telecom reported earnings after the bell today, although their CC is tomorrow morning.  I wasn't too far off in my guesses - too high on network revenue and too low on data but it canceled out.  Overall, revenue of $291.6M was exactly what they promised in September, slower growth reflecting some churn from spreading economic weakness relative to their strong second quarter.  Modified EBITDA of $102.6M, however, was very strong, at 35.2% modified-EBITDA margins the company improved more than [Read more →]

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TW Telecom Q3 Preview

November 5th, 2008
 

Telecom services company TW Telecom (TWTC) reports earnings before the market opens on Thursday, so let's look at some expectations.  The company reported stellar Q2 earnings but a month later issued a prophetic warning that economic weakness was spreading.  In the way only Wall Street can, the company's stock price was first punished for being honest and then punished [Read more →]

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Earnings Primer for Cogent Communications

November 5th, 2008
 

Hello all. Rob has given me the opportunity to write the Cogent primer! Cogent Communications (CCOI) reports earnings before the bell on Thursday. As readers of this blog and the IV board may know, as the market melted down I took positions in CCOI, TWTC, and Q, along with my core position in LVLT. As a consequence I have done a fair amount of research on Cogent and thought it might be [Read more →]

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Level 3 Files Shelf, Includes Kitchen Sink

November 4th, 2008
 

Level 3 (LVLT) registered a shelf in an SEC filing today that allows them, basically, to sell indeterminate amounts of anything they want to anyone with a pulse.  Ok, it's not that wide open, but it does position them to offer any of the following: [Read more →]

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A Dull Hatchet Job by the Washington Post

November 4th, 2008
 

Now, I'm used to weak telecom reporting from some parts of the media, but this one really takes the cake.  The Washington Post, that bastion of newsworthiness, managed to write this wowser: [Read more →]

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FCC Bails on Intercarrier Compensation

November 4th, 2008
 

Again.  The FCC continues to rewrite the definition of the word 'deadline', canceling its planned vote tomorrow on an overhaul of intercarrier compensation.  Today four commissioners rebelled against Chairman Kevin Martin's proposal.  Precisely why is hard to say, because apparently it has not been made available for public view. [Read more →]

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Ceasefire Between Sprint and Cogent?

November 3rd, 2008
 

Today Sprint turned its peering connection with Cogent back on, as you can see here.  So is the war over?  It doesn't look like it, it's more of a unilateral ceasefire by Sprint, to let the women and children clear out. Sprint has explicitly stated that the reconnection is temporary.  In their own words: [Read more →]

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On Internap's CDN Impairment

November 2nd, 2008
 

In a filing last week, internet solutions provider Internap (INAP) finally admitted what everyone already knew, that it paid too much for Vitalstream, and said they would write off some $99.7M in goodwill.  That their entry into the CDN business via M&A and subsequent integration fiasco have done serious damage to shareholder value really can't be questioned.  The exact number to write off, of course, is more about art [Read more →]

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More On the Cogent-Sprint Peering War

November 1st, 2008
 

The severing of peering connections between Cogent and Sprint the other day sent shock waves throughout the sector even as everyone tried to figure out just what had happened and what the extent of the damage was.  There wasn't ever much hope that this would be a short interruption, and in fact everyone seems to be settling in for a long one.  The disagreement between the two, at least in public, seems to be [Read more →]

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Peering War Breaks Out!

October 31st, 2008
 

A border war has broken out between tier-1 providers Cogent Communications (CCOI) and Sprint Nextel (S), they are no longer exchanging traffic.  That means that single homed clients of Cogent cannot access data on Sprint's network, and vice versa.  The internet is, for the time being, partitioned, as one can see here.  Cogent issued its usual PR within hours of the interruption blaming everything on Sprint.  But of course, this is not Cogent's first peering war, or even its second, or third. [Read more →]

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CBeyond and 8×8 Both Hold the Line

October 31st, 2008
 

Both CBeyond and 8x8, two rather different providers of VoIP services to small business customers, reported their quarterly earnings today, and in both cases results were steady though not spectacular.  But then, expecting spectacular results in this environment would be a bit loony.  What matters is the implication that while churn is surely rising somewhat, SME telecom purchases are not suffering all that much. [Read more →]

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Thinking about Akamai's Q3 Report

October 30th, 2008
 

Content Delivery heavyweight Akamai reports Q3 earnings today after the market close.  The CDN market has been quite an interesting place this year, with literally dozens of upstarts raising money and building out competing products, lawsuits clouding the skies, P2P going in and out of fashion, and a half dozen network operators jockeying for pole position.  Through it all, the only company that really matters [Read more →]

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Thejuice's LVLT Post-Q3 Model Update

October 30th, 2008
 

Ok, here's the model with Q3 results and Q4/YE estimates.  As I indicated on the IV board, generally speaking the numbers were real, no gimmicks, but they were a bit light in terms new growth in CSR's as well as improvement in working capital.  Neither of these should be a surprise considering the current environment; I just was a wee bit too [Read more →]

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Savvis Solid When It Counts

October 29th, 2008
 

Colocation and hosting provider Savvis (SVVS) reported earnings today, with some rare good news.  Revenues of $218.4M were up 3% sequentially as expected, adjusted EBITDA of $47.7M was likewise solid, and the loss per share of 0.01 was better than anticipated.  Current 2008 guidance was reaffirmed despite the economic climate, and overall the results were perhaps Savvis's best quarter in some time.  But more important in the near term was what the company said about its financial vertical. [Read more →]

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Switch & Data Also Unshaken

October 29th, 2008
 

As with Equinix last week, datacenter specialist Switch & Data reported earnings Tuesday and didn't even blink in these difficult times.  Revenues of $44.1M and EBITDA of $14.0M were in-line with guidance, and EPS of $0.00 was lower because costs were a bit higher than in past quarters as expected due to the rollout of new datacenters in advance of revenue derived from them. [Read more →]

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Market Valuations for LVLT, CCOI, TWTC

October 29th, 2008
 

Here's something new to keep you busy.  This spreadsheet tracks various valuation metrics for LVLT, CCOI and TWTC.  I get real-time bond pricing from http://cxa.marketwatch.com/finra/MarketData/Default.aspx and stock quotes from www.yahoo.com.  For each firm there are aspects of their capital structure that are not traded thus there is no market price.  Feel free to put whatever number you want in for those.  I have them at 100% because they would be first in line in case of BK.  Also note that an entire [Read more →]

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DuPont Fabros Pulls the Plug in Santa Clara

October 28th, 2008
 

Well, it had to happen sooner or later. Today DuPont Fabros (DFT) suspended construction on a new datacenter project in Santa Clara.  They had needed some $300-400M to fund the project, but were only able to raise $100M from a syndicate led by Keybank.  Instead, they will use those funds to [Read more →]

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