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 →]

4 Comments

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 →]

1 Comment

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 →]

2 Comments

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 →]

3 Comments

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 →]

5 Comments

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 →]

3 Comments

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 →]

Leave a Comment

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 →]

3 Comments

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 →]

Leave a Comment

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 →]

1 Comment

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 →]

2 Comments

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 →]

Leave a Comment

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 →]

3 Comments

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 →]

14 Comments

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 →]

Leave a Comment

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 →]

Leave a Comment

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 →]

3 Comments

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 →]

Leave a Comment

Cox Rolls Its Own Cell Network

October 28th, 2008
 

Apparently unwilling to wait for WiMAX, Cox Communications is going to build its own 3G cell network, in-region.  Out of region, they will strike a deal with Sprint-Nextel, and they are apparently planning to trial LTE.  By contrast, Comcast seems to be planning WiMAX femtocells in a partnership with Clearwire.  Cox's move seems to put them on a quite different path. [Read more →]

4 Comments

Switch & Data Q3 Preview

October 28th, 2008
 

Colocation provider Switch & Data (SDXC) reports earnings on Tuesday after the market closes, following on the heels of Equinix's solid report.  Switch & Data, which went public in an IPO in the first quarter of 2007, operates some 34 carrier neutral datacenters in 23 markets in North America, and like Equinix has been investing heavily in new datacenter space.  Will they be forced to slow down their buildouts because of the economy?  Let's [Read more →]

Leave a Comment

Verizon Checks In

October 27th, 2008
 

Verizon (VZ) reported earnings today, checking in with $24.8B in revenues and its usual billions of dollars of cashflow.  Adjusted EPS of $0.66 seems to have been what the market was expecting.  While the company didn't discuss the effects of the overall economy directly in their press release, no doubt they will say more at their CC later this morning.  But for now, if we didn't already know the world was ending, it sure wouldn't be apparent from Verizon's earnings. [Read more →]

2 Comments

CenturyTel Buying Embarq!

October 27th, 2008
 

CenturyTel (CTL) is buying Embarq (EQ).  Apparently the M&A market in telecom isn't quite dead!  In this case though, it's a bit odd to think about CTL as the buyer since it is the smaller of the two.  Embarq's revenue hovers at $6.3B, whereas CenturyTel is in the $2.6B range.  Indeed, CenturyTel shareholders would own only 35% of the combined company if the merger does in fact happen. [Read more →]

Leave a Comment

Fiber-Based Telecom Valuation Still Falling

October 26th, 2008
 

Two weeks ago, I looked at the new valuations of nextgen facilities-based telecoms, and it seemed that the markets had decided on an enterprise value to EBITDA ratio of roughly 5-6.  Well, the market apparently wasn't done.  While only LVLT has reported, the market has continued to devalue the sector indiscriminately.  So let's take a look at [Read more →]

10 Comments