AboveNet Turns In Steady Q4

National metro operator telecom reported its fourth quarter earnings this morning, turning in its usual solid growth.  Revenues were slightly above both estimates and the high end of guidance, while earnings per share easily beat analyst expectations.  Here’s a quick summary in context:

$ in millions	Q4/10	Q1/11	Q2/11	Q3/11	Q4/11	FY2012 (guidance)
Revenue	$108.1	$114.4	$118.3	$118.2	$121.6	$515-525
Adj. EBITDA	$47.3	$51.5	$54.0	$56.4	$55.9
EBITDA Margin	43.8%	45.0%	45.6%	47.7%	46.0%	~46%
Capex	$47.7	$31.1	$37.3	$40.2	$39.2	$155-165
EPS (diluted)	$0.85	$0.54	$0.60	$0.67	$0.90

Revenue: Fourth quarter revenue was up 2.9% sequentially and slightly higher than guidance last quarter, with $1.5M in equipment revenue helping contribute.  Domestic WAN revenues continued to lead the way.  Guidance for  2012 revenue of $515-525M was perhaps slightly lower than analyst estimates, corresponding to 9-11% growth over 2010.  AboveNet is consistently conservative with its revenue projections, so I don’t find this too surprising.

EBITDA & EPS: Adjusted EBITDA fell squentially to $55.9M, dropping back to more familiar 46% margin territory, which is where the company projects 2012 margins to remain.  As they spend to ramp up their expansion markets while adding depth in more mature ones, these margin levels seem likely to be the norm for some time.  Meanwhile, earnings per share surged to $0.90, easily beating expectations.

Conclusions:  Not much new to see here, just a generally solid quarter and a cautious outlook on 2012.  Frankly though, AboveNet has been rather too quiet lately, and I suspect the status quo won’t make it all the way through the year.  With the stock price back up, perhaps they take the opportunity to make an inorganic move at last?

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Categories: Financials · Internet Backbones · Metro fiber