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Cogent (CCOI) Q1 Earnings & Revenues Top Estimates, Rise Y/Y

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Cogent Communications Holdings, Inc. (CCOI - Free Report) reported healthy first-quarter 2021 results, wherein both the bottom line and the top line beat the respective Zacks Consensus Estimate.

The company’s share price moved up 6.1% on Apr 29, closing the trading session at $72.74.

Net Income

Net income in the March quarter was $18.9 million or 41 cents per share compared with $9.2 million or 20 cents per share in the prior-year quarter. The improvement primarily resulted from higher operating income and foreign exchange gain of $18.9 million on Cogent’s 2024 euro notes. Also, the bottom line beat the Zacks Consensus Estimate by 23 cents.


Quarterly service revenues increased 4.2% year over year to $146.8 million, driven by higher on-net revenues, along with a positive impact of foreign exchange. Also, the top line surpassed the consensus estimate of $144 million.

On-net revenues grew 6.3% year over year to $109.9 million, reflecting an increase in on-net customer connections. On-net service is provided to customers located in buildings that are physically connected to Cogent’s network by its facilities.

Off-net revenues declined 1.6% to $36.7 million. Off-net customers are located in buildings directly connected to Cogent’s network using other carriers’ facilities.

Other Details

Total operating expenses were $120.5 million compared with $115.1 million in the prior-year quarter. Operating income was $26.3 million, up from $25.9 million. EBITDA totaled $55.6 million compared with $50.4 million in the year-ago quarter with respective margins of 37.8% and 35.8%.

Total customer connections grew 4.3% year over year to 90,925 on Mar 31, 2021.

Cogent increased its dividend for the 35th consecutive quarter. It increased its quarterly dividend by 2.5 cents per share to 78 cents for the second quarter of 2021. The amount is payable on May 28 to shareholders on record as of May 14.

Cash Flow & Liquidity

During the first quarter of 2021, Cogent generated $47.1 million of net cash from operating activities compared with $28.5 million in the year-ago quarter.

As of Mar 31, 2021, the company had $238 million in cash and cash equivalents with $202.5 million of finance lease obligations compared with the respective tallies of $371.3 million and $203.4 million at the end of the previous quarter.

Zacks Rank & Stocks to Consider

Cogent currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are Vicor Corporation (VICR - Free Report) , Micron Technology (MU - Free Report) and Western Digital Corporation (WDC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vicor delivered a trailing four-quarter earnings surprise of 80.6%, on average.

Micron delivered a trailing four-quarter earnings surprise of 6.5%, on average.

Western Digital delivered a trailing four-quarter earnings surprise of 10.9%, on average.

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