A month has gone by since the last earnings report for Cincinnati Bell Inc . Shares have lost about 3.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cincinnati Bell Reports Narrower-than-Expected Q1 Loss
Cincinnati Bell's quarterly net income (on a GAAP basis) came in at $57.8 million or $1.37 per share compared with a net income of $4.4 million or $0.10 per share in the year-ago quarter. However, quarterly adjusted (excluding special items) loss per share of $0.01 was narrower than the Zacks Consensus Estimate loss per share of $0.04.
Quarterly total revenue was $278.2 million, down 4% year over year and also lower than the Zacks Consensus Estimate of $295 million.
Operating loss was $5.3 million compared with an operating income of $29.6 million in the year-ago quarter. Meanwhile, adjusted EBITDA (earnings before interest, depreciation and amortization) decreased 8.2% year over year to $70.9 million in the reported quarter. Adjusted EBITDA margin was 25% compared with 27% in the prior-year quarter.
Cash Flow
In first-quarter 2017, Cincinnati Bell generated $53.9 million of cash from operating activities compared with $65.7 million in the prior-year quarter. Quarterly free cash flow was $9.5 million compared with $7.9 million in the year-ago quarter.
Liquidity
Cincinnati Bell ended the first quarter of 2017 with cash and cash equivalents of $44.7 million compared with $9.7 million at the end of 2016. Total debt at first quarter-end was $1,121.9 million compared with $1,206.6 million at the end of 2016.
Segmental Results
Entertainment and Communications revenues rose 3% year over year to $195.3 million owing to a 24% rise in video revenues. The increase was partially neutralized by a 32% decline in services & other revenues.
IT Services and Hardware revenues decreased 16% year over year to $86.2 million. The downside was due to a 38% decline in Management and Monitoring revenues, 25% decline in Telecom and IT hardware revenues, partially mitigated by a 34% rise in cloud services revenues.
Subscribers Statistics
At the end of the first quarter of 2017, Cincinnati Bell had 0.1966 million residential voice lines, down 7.7% year over year and 0.3203 million business voice lines, up 1.4% year over year. Long distance lines were 0.311 million, down 6.9%. DSL Internet subscribers were 0.1001 million, down 21.8%. Fioptics Internet customers were 0.2073 million, up 26%. Fioptics video subscribers were 0.1411 million, up 17.6% year over year.
Outlook
In 2017, Cincinnati Bell expects revenues and adjusted EBITDA of approximately $1.2 billion and $295 million (+/-2%), respectively.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter. In the past month, the consensus estimate has shifted by 950% due to these changes.
VGM Scores
At this time, Cincinnati Bell's stock has an average score of 'C' on both growth and momentum front. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than growth and momentum investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Cincinnati Bell (CBB) Down 3.1% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Cincinnati Bell Inc . Shares have lost about 3.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cincinnati Bell Reports Narrower-than-Expected Q1 Loss
Cincinnati Bell's quarterly net income (on a GAAP basis) came in at $57.8 million or $1.37 per share compared with a net income of $4.4 million or $0.10 per share in the year-ago quarter. However, quarterly adjusted (excluding special items) loss per share of $0.01 was narrower than the Zacks Consensus Estimate loss per share of $0.04.
Quarterly total revenue was $278.2 million, down 4% year over year and also lower than the Zacks Consensus Estimate of $295 million.
Operating loss was $5.3 million compared with an operating income of $29.6 million in the year-ago quarter. Meanwhile, adjusted EBITDA (earnings before interest, depreciation and amortization) decreased 8.2% year over year to $70.9 million in the reported quarter. Adjusted EBITDA margin was 25% compared with 27% in the prior-year quarter.
Cash Flow
In first-quarter 2017, Cincinnati Bell generated $53.9 million of cash from operating activities compared with $65.7 million in the prior-year quarter. Quarterly free cash flow was $9.5 million compared with $7.9 million in the year-ago quarter.
Liquidity
Cincinnati Bell ended the first quarter of 2017 with cash and cash equivalents of $44.7 million compared with $9.7 million at the end of 2016. Total debt at first quarter-end was $1,121.9 million compared with $1,206.6 million at the end of 2016.
Segmental Results
Entertainment and Communications revenues rose 3% year over year to $195.3 million owing to a 24% rise in video revenues. The increase was partially neutralized by a 32% decline in services & other revenues.
IT Services and Hardware revenues decreased 16% year over year to $86.2 million. The downside was due to a 38% decline in Management and Monitoring revenues, 25% decline in Telecom and IT hardware revenues, partially mitigated by a 34% rise in cloud services revenues.
Subscribers Statistics
At the end of the first quarter of 2017, Cincinnati Bell had 0.1966 million residential voice lines, down 7.7% year over year and 0.3203 million business voice lines, up 1.4% year over year. Long distance lines were 0.311 million, down 6.9%. DSL Internet subscribers were 0.1001 million, down 21.8%. Fioptics Internet customers were 0.2073 million, up 26%. Fioptics video subscribers were 0.1411 million, up 17.6% year over year.
Outlook
In 2017, Cincinnati Bell expects revenues and adjusted EBITDA of approximately $1.2 billion and $295 million (+/-2%), respectively.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter. In the past month, the consensus estimate has shifted by 950% due to these changes.
Cincinnati Bell Inc Price and Consensus
Cincinnati Bell Inc Price and Consensus | Cincinnati Bell Inc Quote
VGM Scores
At this time, Cincinnati Bell's stock has an average score of 'C' on both growth and momentum front. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than growth and momentum investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.