The alternative bandwidth provider Cogent Communications (NASDAQ:CCOI, news, filings) posted its fourth quarter numbers this morning. Revenue was basically inline, EBITDA and margins were above expectations, and earnings per share was a bit light. But the steady improvement in the company’s performance since last Spring gave them enough to boost their dividend by another 10% up to $0.12 per share. Here are Cogent’s numbers in some context:
| $ in millions | Q4/11 | Q1/12 | Q2/12 | Q3/12 | Q4/12 |
|---|---|---|---|---|---|
| – On-net | 59.5 | 56.8 | 57.3 | 58.1 | 60.4 |
| – Off-net | 18.9 | 19.5 | 19.9 | 20.9 | 21.6 |
| – Other | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 |
| Revenue | 79.1 | 76.9 | 77.8 | 79.7 | 82.6 |
| EBITDA | 27.8 | 22.6 | 25.3 | 26.2 | 28.5 |
| Earnings per share | 0.12 | -0.05 | -0.04 | 0.00 | -0.01 |
| Gross Margin | 57.8% | 55.4% | 55.0% | 54.3% | 54.6% |
| Adj. EBITDA Margin | 35.2% | 29.3% | 32.6% | 32.9% | 34.6% |
| On-net Buildings | 1744 | 1769 | 1799 | 1832 | 1867 |
In the wake of the market’s reaction to CenturyLink’s dividend cut last week, Cogent’s move to raise its own dividend again for the second straight quarter makes a clear point. And whether it was intentional or not, it was certainly delicious enough to put in the PR’s headline. Looking for a place where revenues, margins, *and* dividends are going up? Tear your eyes away from the copper and legacy voice already…
Of course, Cogent’s dividend is at least partly its way of returning all that cash they have on their balance sheet to shareholders given the lack of places to spend it. As CEO Dave Schaeffer discussed in a recent interview here on Ramblings, Cogent doesn’t really see attractive M&A opportunities out there and is looking at further expansion by going deeper into their current on-net footprint moreso than via new buildouts and fiber purchases.
With EBITDA margins approaching 35% again and a growth trend back in place, Cogent’s EPS looks ready to turn positive for good this coming year.
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!
Categories: Fiber Networks · Financials
Join Our LinkedIn Group
The trending of this company would be boring if it weren’t so accretive to value. Adjusted growth (ex Mega Upload) continues to outperform the industry and while the stock looks nominally expensive measured on EV/EBITDA, adjusted for growth (EBITDA and FCF) it remains the cheapest stock among its peer group. I think if you own this sector then you must have CCOI as part of a portfolio– unless you are a one stock moron and proud of it.
These people are in the telecom/internet business and have a lack of places to invest? When are they leaving the telecom/internet business? They must be kidding me! No, it’s investors since that, stupidly, they have a tendency to flock by increasing the stock prices of dividend payers increasing payouts even while more “cash” leaves the balance sheet.
Mission accomplished for whom? Hey, if they bloat this price up any higher, they can buy twtc from enron as well as seam for its nose bleeding premium.
I notice their OFF NET building revenue is increasing at a more rapid pace qoq vs. yoy. This should alarm some tied to access costs, but it won’t.
BTW, any reason you chose to not feature Limelight’s horrible business conditions contained in their report, and the withholding of guidance for the unforeseeable future which took place this week? Goldman must be happy.
Yes, this is the REAL CARLK you bunch of FOCKERS! 🙂
And while YOU IDIOTS are at it, why don’t you see if you can create an impostor of me at these two sites as easily as Rob Powell has enabled you to make a mockery of his “Telecom Ramblings” site!
This is the real CarlK again, calling you out to his woodshed!
http://seekingalpha.com/article/1208641-what-s-wrong-with-level-3-communications?source=google_news
http://billmoyers.com/segment/susan-crawford-on-why-u-s-internet-access-is-slow-costly-and-unfair/
I guess I should talk a little about my woodshed. It is there that I keep my effigies of GOLDMAN SUCKS and other WRONG STREET miscreants including enron-blow -hard who together are plotting against ME and other champions of FREE MARKETS.
I also keep in the woodshed a shrine to CHARLIE MUNGER where, when the other voices and my dog arent talking to me, I listen to most all of what he has to say. AND I ACT UPON IT. LOL IMO.
Charlie has asked me to make a doll of that pipsqeek thing called COGENT and the bloated carcass of TWTC. I shall do this for I am CarlK, the realcarlK. If you are cheap labor anywhere in the free world and reading this, BE WARNED FOR VENGEANCE SHALL BE MINE. IMO LOL.