Telecom services provider
Cincinnati Bell Inc.
) reported fourth-quarter 2013 adjusted loss of five cents per
share, missing the Zacks Consensus Estimate of a profit of a
penny. The results also deteriorated from the year-ago loss of a
In 2013, adjusted earnings per share came at 2 cents, down
from 11 cents in 2012.
Revenues declined 18.0% year over year to $308.4 million but
surpassed the Zacks Consensus Estimate of $306.0 million.
Revenues for the year deteriorated 14.7% year over year to
Adjusted EBITDA (non-GAAP) decreased 28.7% year over year to
$90.0 million in the reported quarter. EBITDA margin was 29%,
down 500 basis points year over year.
In 2013, adjusted EBITDA (non-GAAP) was $415.6 million, down
1.9% year over year. EBITDA margin stood at was 22.3%, down
300 basis points year over year.
The year 2013 was transformational for the company as it
successfully listed CyrusOne and ended up with more than $100
million in Fioptics revenues. These positives along with Fioptics
customer growth pushed the stock price higher by 6.15% on
Thursday trade on NYSE, despite the weak results.
revenue remained flat year over year at $182.1 million owing to
61% growth in entertainment and 4.0% growth in wireline data
revenues. The improvement was partially offset by 25%, 11% and 4%
declines respectively in other, local service voice and VoIP
Total local access lines declined 7.5% year over year to
530,700 at the end of the reported quarter and comprised 476,000
in-territory lines and 54,700 out-of-territory lines.
The company added 9,000 high-speed Internet customers
(including Fioptics and DSL) during the reported quarter,
bringing its total subscriber base to 268,400 (including 188,500
DSL broadband subscribers).
Cincinnati Bell continues to expand the availability of its
Fioptics fiber-to-the-home product suite, which provides
entertainment, high-speed Internet and voice services. Fioptics
entertainment subscribers reached 74,200 customers at the end of
the fourth quarter from 55,100 in the year-ago quarter.
revenues declined 17.0% year over year to $47.4 million due to
lower service revenues (down 18%) partially offset by Equipment
revenues (up 8%).
The company exited the fourth quarter with 339,700 wireless
customers, including 197,400 and 142,300 post-paid and prepaid
customers, respectively. This compares unfavorably with 397,800
wireless customers in the year-ago quarter and 355,200 in the
IT Services and Hardware
revenues declined 1% year over year to $86.1 million. Revenues
from Managed and Professional services increased 20% while
Telecom and IT equipment distribution revenues declined 10%.
CyrusOne reported revenues of $72.0 million in fourth quarter
2013 and $264.0 million for the full year. Cincinnati Bell
continues to own 69% of CyrusOne.
Cincinnati Bell ended 2013 with cash and cash equivalents of
$4.6 million, down from $23.6 million in the year-ago quarter.
Net debt decreased to $2.26 billion from $2.67 billion at the end
The company incurred free cash flow of ($55.3) million in 2013
compared with $154.1 million in 2012.
For fiscal 2014, Cincinnati Bell expects revenue and adjusted
EBITDA of approximately $1.2 billion and $383 million (plus or
minus 2%), respectively.
For fiscal 2014, CyrusOne expects revenues in the range of
$305-$315 million and adjusted EBITDA in the range of $160-$165
Based on the continued demand for its strategic products, the
company expects to generate positive free cash flow in 2014.
Cincinnati Bell's Wireline segment remains its prime growth
driver based on its strong Fioptics business. Taking up new
projects and the spin-off of CyrusOne into a separate entity are
expected to work in favor of the company and aid earnings growth
in the future. The company currently carries a Zacks Rank #2
Other stocks worth considering within this sector are
BT Group plc
Level 3 Communications Inc.
Telecom Italia S.p.A
). All these stocks currently carry the same Zacks Rank as
BT GRP PLC-ADR (BT): Free Stock Analysis
CINCINNATI BELL (CBB): Free Stock Analysis
LEVEL 3 COMM (LVLT): Free Stock Analysis
TELECOM ITA-ADR (TI): Free Stock Analysis
To read this article on Zacks.com click here.