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Cincinnati Bell (CBB) Beats Q3 Earnings, Keeps 2016 View
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Cincinnati Bell Inc. reported strong financial numbers in third-quarter 2016 wherein both the top and the bottom line beat the Zacks Consensus Estimate.
On a GAAP basis, quarterly net income came in at $18.8 million or 38 cents per share compared with a net income of $79.3 million or $1.85 in the year-ago quarter. Meanwhile, adjusted (excluding special items) earnings per share of 7 cents beat the Zacks Consensus Estimate of 5 cents.
Quarterly total revenue was $312.4 million, up 4% year over year and above the Zacks Consensus Estimate of $301 million.
Operating income was $25.5 million, down 30% year over year owing to higher SG&A (Selling, General and Administrative Expenses) costs along with depreciation and amortization charges. Meanwhile, adjusted EBITDA (earnings before interest, depreciation and amortization) remained flat year over year at $77.5 million in the reported quarter. EBITDA margin was 25% compared with 26% in the year-ago quarter.
Cash Flow
In the third quarter of 2016, Cincinnati Bell generated $43.6 million of cash from operating activities compared with $62 million in the prior-year quarter. Quarterly free cash flow was a negative $21.3 million compared with a negative $0.6 million in the year-ago quarter.
Liquidity
Cincinnati Bell ended the third quarter with cash and cash equivalents of $8.5 million compared with $14.8 million at the end of 2015. Net debt at quarter-end was $1,125.1 million as compared with $1,230.2 million at 2015-end.
Segmental Results
Entertainment and Communications revenues rose up 4% year over year to $193 million owing to a 12% rise in Consumer revenues. The increase was partially neutralized by an 11% decline in Carrier revenues.
IT Services and Hardware revenues increased 5% year over year to $122.9 million. The upside came on the back of a 10% increase in business revenues and 2% rise in integration revenues.
Subscribers Statistics
At the end of the third quarter of 2016, Cincinnati Bell had 0.2049 million residential local access lines, down 7.5% year over year and 0.3189 million business local access lines, up 3.8% year over year. Long distance lines were 0.323 million, down 6%. DSL Internet subscribers were 0.114 million, down 17.2%. Fioptics Internet customer count totaled 0.185 million, up a whopping 29.2%. Fioptics video subscribers were 0.1334 million, up 23% year over year.
Outlook
Cincinnati Bell maintained its guidance for full-year 2016. The company expects revenues and adjusted EBITDA of approximately $1.2 billion and $303 million (plus or minus 2%), respectively.
Cincinnati Bell currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Telecom Italia S.p.A. , Shenandoah Telecommunications Co. (SHEN - Free Report) and Telekom Austria AG . All the three stocks carry a Zacks Rank #2 (Buy).
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Cincinnati Bell (CBB) Beats Q3 Earnings, Keeps 2016 View
Cincinnati Bell Inc. reported strong financial numbers in third-quarter 2016 wherein both the top and the bottom line beat the Zacks Consensus Estimate.
On a GAAP basis, quarterly net income came in at $18.8 million or 38 cents per share compared with a net income of $79.3 million or $1.85 in the year-ago quarter. Meanwhile, adjusted (excluding special items) earnings per share of 7 cents beat the Zacks Consensus Estimate of 5 cents.
Quarterly total revenue was $312.4 million, up 4% year over year and above the Zacks Consensus Estimate of $301 million.
Operating income was $25.5 million, down 30% year over year owing to higher SG&A (Selling, General and Administrative Expenses) costs along with depreciation and amortization charges. Meanwhile, adjusted EBITDA (earnings before interest, depreciation and amortization) remained flat year over year at $77.5 million in the reported quarter. EBITDA margin was 25% compared with 26% in the year-ago quarter.
Cash Flow
In the third quarter of 2016, Cincinnati Bell generated $43.6 million of cash from operating activities compared with $62 million in the prior-year quarter. Quarterly free cash flow was a negative $21.3 million compared with a negative $0.6 million in the year-ago quarter.
Liquidity
Cincinnati Bell ended the third quarter with cash and cash equivalents of $8.5 million compared with $14.8 million at the end of 2015. Net debt at quarter-end was $1,125.1 million as compared with $1,230.2 million at 2015-end.
Segmental Results
Entertainment and Communications revenues rose up 4% year over year to $193 million owing to a 12% rise in Consumer revenues. The increase was partially neutralized by an 11% decline in Carrier revenues.
IT Services and Hardware revenues increased 5% year over year to $122.9 million. The upside came on the back of a 10% increase in business revenues and 2% rise in integration revenues.
Subscribers Statistics
At the end of the third quarter of 2016, Cincinnati Bell had 0.2049 million residential local access lines, down 7.5% year over year and 0.3189 million business local access lines, up 3.8% year over year. Long distance lines were 0.323 million, down 6%. DSL Internet subscribers were 0.114 million, down 17.2%. Fioptics Internet customer count totaled 0.185 million, up a whopping 29.2%. Fioptics video subscribers were 0.1334 million, up 23% year over year.
Outlook
Cincinnati Bell maintained its guidance for full-year 2016. The company expects revenues and adjusted EBITDA of approximately $1.2 billion and $303 million (plus or minus 2%), respectively.
CINCINNATI BELL Price, Consensus and EPS Surprise
CINCINNATI BELL Price, Consensus and EPS Surprise | CINCINNATI BELL Quote
Zacks Rank & Stocks to Consider
Cincinnati Bell currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Telecom Italia S.p.A. , Shenandoah Telecommunications Co. (SHEN - Free Report) and Telekom Austria AG . All the three stocks carry a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>