Telecom services provider,
Cincinnati Bell Inc.
), reported second-quarter 2013 adjusted earnings of 4 cents per
share, beating the Zacks Consensus Estimate of 2 cents. The
results deteriorated from the year-ago earnings of 5 cents.
Revenues declined 15.3% year over year to $312.0 million but
surpassed the Zacks Consensus Estimate of $304.0 million.
Adjusted EBITDA decreased 25.3% year over year to $104.2
million in the reported quarter. EBITDA margin was 33%versus 38%
in the prior-year quarter.
On Jan 24, 2013, Cincinnati Bell separated the Data Center
Colocation segment through an initial public offering of CyrusOne
Inc. The company's second-quarter results exclude the operations
of CyrusOne Inc.
Wireline revenues fell 1.1% year over year to $181.6 million
due to a drop of 19%, 10% and 8% in Other, Voice and Long
distance revenues, respectively. This was partially offset by 55%
and 4% growth in Data and Entertainment revenues,
Total local access lines declined 8.10% year over year to
550,000 at the end of the reported quarter and comprised 492,700
in-territory lines and 57,300 out-of-territory lines.
Total High-speed Internet customers for the period were
261,700 (including 194,900 DSL broadband subscribers and 66,800
Fioptics users), up 1.6% year over year.
Cincinnati Bell continues to expand the availability of its
Fioptics fiber-to-the-home products suite, which provide
entertainment, high-speed Internet and voice services. Fioptics
entertainment subscribers reached 66,800 customers at the end of
the second quarter, up from 47,100 in the year-ago quarter.
Wireless revenues declined 16.3% year over year to $51.7
million due to lower service (down 4%) revenues. The company
exited the second quarter with 370,000 wireless customers,
including 223,100 postpaid (down 21.7% year over year) and
146,900 prepaid customers (up 1.2% year over year).
IT Services and Hardware revenues climbed 11.2% year over year
to $86.0 million while revenues from Managed and Professional
services were up 8.7% year over year. Telecom and IT equipment
distribution revenues grew 12.6%.
Cincinnati Bell ended the quarter with net debt of $2.19
billion compared with $2.69 billion at the end of 2012. The
company incurred capital expenditure of $45.0 million.
For full-year 2013, Cincinnati Bell expects revenues and
adjusted EBITDA of approximately $1.2 billion and $390 million,
We believe that Cincinnati Bell enjoys a comfortable market
position owing to its distinguished brand name, attractively
priced service bundles as well as proactive marketing and
expansion strategies. Cincinnati's Wireline segment remains the
prime growth driver for the company 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.
Other telecom companies like
Frontier Communications Corp.
) reported second-quarter results on Aug 7, 2013, after the
) reported second-quarter results on Aug 8, 2013, before the
market opened. Frontier's adjusted earnings of 6 cents were in
line with the Zacks Consensus Estimate, while CenturyLink's
adjusted earnings of 69 cents were ahead of the Zacks Consensus
Estimate of 67 cents. However, Windstream's adjusted earnings of
7 cents lagged the Zacks Consensus Estimate of 9 cents.
Currently, Cincinnati Bell carries a Zacks Rank #1 (Strong
CINCINNATI BELL (CBB): Free Stock Analysis
CENTURYLINK INC (CTL): Free Stock Analysis
FRONTIER COMMUN (FTR): Free Stock Analysis
WINDSTREAM CORP (WIN): Free Stock Analysis
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