Internap Earnings Primer

August 5th, 2008
 

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 →]

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Bandwidth Intensive Applications and IP Transit

August 5th, 2008
 

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 →]

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Ramblings on XO, Icahn, and those NOLs

August 4th, 2008
 

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 →]

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Global Crossing Earnings Preview

August 4th, 2008
 

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 →]

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A Fantastic July

August 1st, 2008
 

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

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PAETEC Stumbles

August 1st, 2008
 

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 →]

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Updated Level 3 Model and Projections for Q3 2008

July 31st, 2008
 

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 →]

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Akamai Bends to Reality

July 31st, 2008
 

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 →]

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Rusin Skewers the Street

July 31st, 2008
 

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 →]

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No Recession Here

July 30th, 2008
 

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 →]

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CDN Pricing Ramblings

July 30th, 2008
 

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 →]

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Savvis Earnings Primer

July 29th, 2008
 

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 →]

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Reliance Partners Into CDN Via Internap

July 29th, 2008
 

In an interesting partnership, Internap will be opening a CDN POP in Mumbai, India, presumably with Reliance's aid, and Reliance Globalcom will be reselling CDN services 'powered by Internap'.  [Read more →]

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XO's new capital structure

July 29th, 2008
 

Well, I went through the exercise of working out XO's new capital structure, as compared with the old one: [Read more →]

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Icahn Gets His Way at XO

July 28th, 2008
 

Was there ever any doubt?  XO Communications has finally refinanced its debt, and it did so almost entirely through its majority owner Carl Icahn.  They did so by issuing huge piles of two kinds of preferred stock amounting to $780M.  Of course, they are offering to issue another $39M to the larger minority shareholders, throwing them a bone I guess. [Read more →]

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TheJuice's Level 3 model – Q2 results

July 27th, 2008
 

Alright, here's the updated model with actual results versus my expectations. It was an interesting quarter and a good one at that - all things considered.

Revenues: Adjusted CNS grew app. 2% Q108-Q208 after being essentially flat from Q407 - Q108. Furthermore, [Read more →]

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Vonage Visits the Shark Tank

July 27th, 2008
 

After various stops and starts, Vonage has finally found someone to loan them the money to refinance their debt - they must do this by December or go belly up. Ike Elliott, who follows Vonage more carefully than I do, has a nice writeup on the financing. To put it bluntly, it is very, very expensive money. When someone raises debt at a floating rate of 15% with this many restrictive financial covenants, it generally means the bank has them by the balls and this case is no different. [Read more →]

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AT&T challenges Sprint/Clearwire?

July 26th, 2008
 

Light Reading reports that AT&T has filed a complaint with the FCC, alleging that the Sprint/Clearwire deal should be declined.  That's right, you heard correctly.  An incumbent, which enjoys monopoly status in half the country and which has brought the entire USA telecom industry into a near duopoly alongside Verizon via massive M&A's, is complaining [Read more →]

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Optimum Lightpath on the Move

July 25th, 2008
 

Last month, in my series on lit buildings, Optimum Lightpath showed up as the most densely connected alternative metro fiber provider out there.  Of course, being focused on New York City and its suburbs - the most densely populated area in the country - makes that density possible, but nevertheless I had never really noticed this division of Cablevision  until then.  Well last week they made a move, [Read more →]

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Further Level 3 thoughts

July 25th, 2008
 

Level 3 common went up 20% prior to earnings, and is giving about half of that back today.  Traders will be traders, big deal.

The important thing for Level 3 is that they finally got past a major hurdle.  They got operations under control, not in words but in action[Read more →]

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Level 3 Throws a Party

July 24th, 2008
 

Level 3 (LVLT) reported earnings today, and as with AT&T and Equinix yesterday, the verdict is a good one.  The company reported EBITDA of $251M, well above wall street predictions, and core revenue of $972M which was pretty much in-line.  [Read more →]

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Equinix 2, Economy 0

July 24th, 2008
 

Equinix reported earnings today, beating Q2 guidance and raising their full year estimates for both revenue and EBITDA.  Again.  After all, they just did that in April.  As mentioned earlier on this blog, Equinix was the first pure internet infrastructure player to report and their results could give us a glimpse of the extent to which this sector is being hurt by the economy.  Well, Equinix shrugged off the macro trends without slowing down.  [Read more →]

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AT&T Reports: Wireless Yum! Wireline Ho Hum.

July 23rd, 2008
 

AT&T reported earnings today, and investors seem to like the results initially.  What always strikes me when I read their earnings releases is just how dependent they are on their wireless division.  What almost happened this time is that the segment income from wireless ($3.0B) very nearly passed that of wireline ($3.1B) on two thirds of the revenue base.  [Read more →]

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