) reported second-quarter 2013 adjusted earnings per share of
$1.27, far ahead of Zacks Consensus Estimate of 69 cents. The
quarter's figure excludes a loss from debt extinguishment ($1.90
per share), restructuring gains, acquisition costs, but includes
stock-based compensation expense.
Total revenue in the reported quarter was $525.7 million, up
15.0% from the year-ago quarter. The company witnessed decent
revenue growth across all three geographic regions of the network
vertical, especially in Asia-Pacific. The company's 1,150 cloud
and IT services' customers generate 24% of the total revenue.
Apart from this, the company witnessed substantial growth
witnessed in the Software-as-a-Service. This sub segment
continues to contribute a lot of revenue as the end users
continue to require highly interconnected footprint to deliver
the application performance their customers expect.
(including colocation, interconnection and managed services) were
$502.5 million during the second quarter, up 15.8% from the
were $23.2 million in the quarter, down 1.1% from $23.5 million
reported in the year-ago quarter.
Gross margin for the quarter was 49.1% versus 50.7% in the
year-ago quarter. The gross margin as the cost of revenue
increased by 19.1% compared to the year-ago quarter.
Total operating expenses increased 12.3% from the year-ago
quarter. The year-over-year increase in operating expenses was
primarily attributed to higher selling and marketing expenses (up
24.9%) and general and administrative expenses (up 10.0%).
Operating income from continuing operation was $112.2 million,
up 9.9% from $102.1 million reported in the year-ago quarter.
Net loss attributable to Equinix stood at $28.7 million or 58
cents per share compared to net income of $36.4 million or 72
cents per share in the year-ago quarter. Adjusted earnings per
share were $1.27.
Balance Sheet & Cash Flow
Equinix continues to generate cash from operating activities
of $147.2 million as compared to $84.2 million in the previous
quarter. Cash, cash equivalents and investments were $1.22
billion, as compared to $1.21 billion in the previous
Equinix reported capital expenditures of $122.9 million, of
which $82.7 million forms part of the expansion capital
expenditures and $40.2 million was attributed to ongoing capital
expenditures. The company has loans payable of $164.9 million,
while convertible debts stood at $716.3 million.
Equinix expects the third quarter of 2013 revenues in the
range of $538.0 million to $542.0 million. Cash gross margins are
expected to approximate 68%, while the cash selling, general and
administrative expenses are expected to range between $126.0
million and $130.0 million, while the adjusted EBITDA is expected
in the range of $236.0 million and $240.0 million.
Moreover, capital expenditures are expected to be
approximately $180.0 million to $200.0 million, comprising of
mainly $50.0 million of ongoing capital expenditures and $130.0
million to $150.0 million of expansion capital expenditures.
For the full year of 2013, total revenue is expected between
$2,135.0 million and $2,145.0 million. The full year cash gross
margins is expected to be around 68%. Cash selling, general and
administrative expenses are expected to range between $465.0
million and $475.0 million.
Adjusted EBITDA is expected to hover in the range of $985.0
million to $990.0 million, Capital expenditures for 2013 is
expected in the range of $575.0 million to $625.0 million, mainly
comprised of $165.0 million of ongoing capital expenditures and
$410.0 to $460.0 million for expansion capital expenditures.
Equinix reported second-quarter 2013 earnings ahead of the
Zacks Consensus Estimate. Total revenue for Equinix improved on a
year-over-year basis as the companies witnessed revenue growth
across geographies and revenue segments.
The company provided decent fiscal year and third-quarter 2013
guidance. Demand for Equinix' data centers are growing, which is
attracting new clients. Equinix has also gained from its recent
acquisitions. The recurring revenue model is working well for the
company and providing enough revenue support.
On the other hand, the company must work to reduce its debt
level although it has cleared a considerable amount of debt in
the reported quarter. In spite of all the positives, competitive
threats from the likes of
) raise our apprehension. European exposure and industry
consolidation are the other headwinds.
Equinix has a Zacks Rank #3 (Hold).
Investors can also consider other stocks such as
). Both have a Zacks Rank #1 (Strong Buy).
CA INC (CA): Free Stock Analysis Report
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EQUINIX INC (EQIX): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
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