Telecom Ramblings

TW Telecom reported results after the bell today, their conference call is tomorrow morning.  The speedy release was understandable though, because their results were powerful.  Revenues of $290.1M exceeded most forecasts as did EBITDA of $98.8M, and most importantly they did in fact break through to [Read more →]

On Friday, Rackspace (RAX) went public, and its IPO was widely panned as a failure.  The stock finished at $10.01, below the $12.50 it had been priced at.  The whole IPO-day rat race has seemed stupid to me for a long time.  After all, it sounds as if the people who had a bad day were [Read more →]

On Tuesday morning, TW Telecom reports Q2 2008 earnings.  TW Telecom is perhaps of the most solid of the nextgen fiber-based telecoms.  And this earnings call could usher in a new era for them:  positive earnings.  Not positive EBITDA, or positive cash flow, [Read more →]

Level 3 has returned to Asia at last, albeit just for CDN so far. Well, that's not entirely fair. The company has always done business across the Pacific, and until they sold it their Software Spectrum business had a presence as well. The CDN assets they bought from Savvis did include a few starter nodes in Asia, which is the seed they are now trying to get started. But Level 3 hasn't built and maintained substantial network assets there since they [Read more →]

Cogent reported earnings today, with revenues checking in at $53.9M - below the $54.5M floor they had projected.  EBITDA of $16.6M wasn't far off the $17M projections, however the company made material reductions in guidance for the second half of the year, cutting revenue projections from $225-235M to 'over $218M', and ebitda from $75-85M down to 'more than $65M'.  Earnings per share estimates were reduced from $(0.20)-(0.30) to $(0.50)-(0.60).  [Read more →]

Today's rant stems from an insightful reader's comment on my earlier post Bandwidth Intensive Applications and IP Transit which prompted me to put something into words.  Here is the comment by Graeb: [Read more →]

CBeyond (CBEY) reported earnings today, reporting revenues of $85M, EBITDA of $13.7M, and earnings of $0.02.  None of that came as much of a surprise, it was in line with guidance and expectations.  Some, including Citibank, thought CBeyond might show the same symptoms as PAETEC, since both serve the enterprise and both build their networks out of leased circuits from other carriers. [Read more →]

It seemed everything was over last week when Carl Icahn and XO came to terms on the refinancing of its senior debt.  The terms were steep but not unexpectedly so, but apparently the game is not over.  Today R2 Investments/Amalgamated Gadget filed a letter with the SEC announcing its suspicion that minority shareholders were taken advantage of, here is part of it: [Read more →]

Hey everybody!  Abovenet has a 10G backbone!  How exciting, welcome to the 21st century, yeesh.   This is news?  Heck, even Viatel managed do that last year, and they might be a bigger financial basketcase than Abovenet.  [Read more →]

Internap reported earnings a short while ago, and comparing with the primer I posted earlier things don't look particularly wonderful.  IP revenues fell sequentially, as did CDN revenues.  Colocation revenues were up, but not particularly strongly, and rising costs meant that EBITDA of $5.5M was well off the pace. [Read more →]

Global Crossing reported earnings today, and they don't seem to be feeling any effects from the macro economic environment.  With respect to the projections from my earnings primer, revenues were a bit stronger than expected at $653M, adjusted gross margin was inline 53.1%, and [Read more →]

Internap (INAP) reports earnings Tuesday after the market closes, so here is a quick summary of what to look for.  Internap has three lines of business:  IP transit, colocation, and CDN, and they focus all three on small to mid-sized web-centric companies that colocate their servers in datacenters.  They do not serve the enterprise customer base that is apparently giving PAETEC trouble but they do compete with Akamai on CDN, their results will be a barometer for the high end web-centric sector. [Read more →]

I've been asked several times over the last month by skibare, a regular reader and (infamous) Level 3 partisan, to discuss the bandwidth choices of the most bandwidth intensive of the current generation of websites.  He has in mind MySpace, Facebook, Youtube, and Skype, but I will comment on the bandwidth choices of such sites in a more general fashion. [Read more →]

Now that Carl Icahn has gotten what he wanted, access to the $2-3B in net operating losses, or NOLs, that XO has been sitting on, it is time to look at what happens next. Does Icahn intend to operate the business on into the future? I suspect not, his money has sat here longer than it usually sits anywhere, and he hasn't shown actual interest in telecom in quite some time. [Read more →]

On Tuesday morning we hear how the world has been treating another next-generation carrier - Global Crossing.  A combination of M&A rumors and management turnover have raised speculation that the company will be sold soon, but the price it would bring remains unclear.  [Read more →]

Telecom Ramblings has continued to grow rapidly, and July has been a great month.  My thanks to everyone! [Read more →]

Today PAETEC (PAET) announced preliminary results that aren't going to make anyone happy. While the final numbers won't be in for another week or two, revenue is expected to come in at $401-406M and ebitda to be substantially the same as in Q1, or $59.5M. After adjusting for the McLeodUSA acqusition which closed in February, this implies non-existent sequential organic growth, if not a decline. [Read more →]

I have updated my financial model for Level 3 Communications (LVLT), and along with it come some basic projections for the Q3 and Q4.  Along with those numbers comes the assumption that Level 3 will show sales growth in the third and fourth quarters and that SG&A will continue to drop as a percentage of revenue, both as indicated by management. [Read more →]

Akamai published its second quarter earnings today, with revenues of $194M at the low end of its guidance and earnings per share of $0.19.   More importantly, they reduced revenue and earnings guidance for the third quarter and full year.  They blamed a 'challenging operating environment' and macro economic trends. [Read more →]

Over on Telecom Straight Shooter, Dave Rusin has a fantastic post about how little Wall Street understands the telecom business.  I'd call it a rant if his aim weren't so deadly accurate, it is very much worth reading  His sentiment echos some I have received on this blog from readers, such as Anthony's comment today:  many of the depressing macro trends we hear about - gas prices rising, companies looking to cut spending - they tend to benefit telecom, not hurt it. [Read more →]

Earnings season has already shown us one thing:  there is no recession anywhere near the datacenter.  First Equinix raised guidance last week, then yesterday both Savvis and Switch & Data reported revenues above expectations, and Switch & Data increased guidance as well.  Growth rates for colocation seem to be at least 30% across the board, with no slowdown in sight.  [Read more →]

Dan Rayburn reports that CDN pricing was essentially stable this quarter.  That is certainly good news for the CDN's out there, since if traffic grows but the price does not fall, healthy revenue growth must follow.  Yet in parallel, Raymond James reduced its estimates of Akamai's (AKAM) growth on the grounds of increasing pricing pressure from Level 3 (LVLT), saying also that Limelight's (LLNW) growth is at even greater risk.  Which is it? [Read more →]

Savvis reports earnings after the market close today, so it is time to quickly look at expectations for the quarter in light of Equinix's nice results.  Savvis has been hammered repeatedly over the past year, most recently in April when they reduced guidance substantially across the board.  Frankly, they were guilty of some very rosy projections in February and they got punished for it.  [Read more →]