A week or so earlier than usual and a day and a half after its prospective acquirer did so, tw telecom posted its second quarter results. They saw revenue growth pick up a little bit over the past few quarters, moving up 2.8% sequentially and beating estimates slightly. Earnings per share seems to have been inline after excluding merger-related costs. Here are their numbers in some context:
| ($ in millions) | Q2/13 | Q3/13 | Q4/13 | Q1/14 | Q2/14 |
|---|---|---|---|---|---|
| – Data & Internet Services | 220.1 | 226.5 | 235.2 | 243.7 | 253.0 |
| – Network Services | 64.1 | 61.6 | 60.0 | 58.4 | 56.7 |
| – Voice Services | 76.4 | 77.3 | 76.8 | 77.4 | 77.9 |
| – Intercarrier Compensation | 8.3 | 7.3 | 6.6 | 6.1 | 6.7 |
| – Taxes & Fees | 20.6 | 20.5 | 21.4 | 22.8 | 25.1 |
| Total Revenue | 389.5 | 393.2 | 400.0 | 408.3 | 419.7 |
| M-EBITDA | 137.3 | 138.5 | 140.7 | 136.8 | 138.4 |
| M-EBITDA Margin | 35.3% | 35.2% | 35.2% | 33.5% | 33.0% |
| Adj. Earnings per share | 0.12 | 0.12 | 0.11 | 0.07 | 0.08 |
| Revenue Churn | 0.9% | 1.0% | 0.8% | 0.8% | 0.9% |
| Capital Expenditures | 101.0 | 102.0 | 208.0 | 102.2 | 95.2 |
| On-net buildings added | 616 | 566 | 607 | 523 | 554 |
| Free Cash Flow | 16.1 | 16.3 | (34.1) | 10.8 | 20.0 |
Margins remained lower than they have been historically, which is not at all unexpected due to all the market expansion work the company has been doing for the past 8 months. Capex ticked back down below the $100M mark for the quarter, the first time we’ve seen that in a while with or without the market expansion projects. But tw telecom kept up its on-net building pace, adding 554 more during the quarter. and breaking the 21K mark.
With the Level 3 deal set to close in Q4 and I suspect possibly in October, this very well may be the last earnings report we get from tw telecom before the closing of the deal. For almost a decade we’ve almost been able to set our watches by tw telecom’s numbers and performance, as they usually chose focus and discipline over the more free-wheeling consolidation on the other side of the fence.
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Categories: Financials · Metro fiber
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