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Zayo Group (ZAYO) Misses Q2 Earnings & Revenue Estimates
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Zayo Group Holdings, Inc. reported lackluster second-quarter fiscal 2019 results, wherein both the top line and bottom line missed the respective Zacks Consensus Estimate.
Quarterly earnings came in at $30.2 million or 13 cents per share compared with $13.2 million or 5 cents per share in the year-earlier quarter. The year-over-year increase in earnings, despite lower revenues, was primarily due to lower operating expenses. The bottom line missed the consensus estimate by a couple of cents.
Zayo Group Holdings, Inc. Price, Consensus and EPS Surprise
Revenues decreased to $639.1 million from $653.1 million and missed the Zacks Consensus Estimate of $643 million. Operating income improved to $144.7 million from $103.2 million in the year-ago quarter owing to lower operating expenses. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) decreased to $321.2 million from $328.9 million.
Segmental Details
Revenues from the Fiber Solutions segment totaled $228.7 million, up from $203.4 million in the prior-year quarter. It represented 35.8% of the company's fiscal second-quarter revenues.
The Transport segment generated revenues of $169.8 million compared with $166 million in the year-ago quarter. It represented 26.6% of total revenues in the reported quarter.
The Enterprise Networks segment's revenues were $81.6 million, down from $93.9 million and accounted for 12.8% of the company's quarterly revenues.
Revenues at the Zayo Colocation segment were down to $57.5 million from $59.9 million. It represented 9% of fiscal second-quarter revenues.
The Allstream segment generated revenues of $96.7 million, down 22% year over year and represented 15.1% of total revenues in the reported quarter.
The Other segment's revenues were $4.8 million, down from $6.4 million and accounted for 0.8% of the company's fiscal second-quarter revenues.
Liquidity & Cash Flow
As of Dec 31, 2018, Zayo’s cash and cash equivalents were $176.4 million, with long-term debt of $5,902.6 million. Net cash provided by operating activities for the first six months of fiscal 2019 was $472.4 million compared with $456.7 million a year ago. Adjusted unlevered free cash flow was $132.3 million with $231.8 million borrowing capacity under the revolving credit facility.
During the quarter, the company repurchased 12,967,633 shares at an average price of $31.02.
Harris has a long-term earnings growth expectation of 8%. It beat earnings estimates in each of the trailing four quarters, the average positive surprise being 2.9%.
Ubiquiti has a long-term earnings growth expectation of 14%. It beat earnings estimates thrice in the trailing four quarters, the average positive surprise being 11.3%.
Comtech has a long-term earnings growth expectation of 5%. It surpassed earnings estimates in each of the trailing four quarters, the average positive surprise being 252.3%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Zayo Group (ZAYO) Misses Q2 Earnings & Revenue Estimates
Zayo Group Holdings, Inc. reported lackluster second-quarter fiscal 2019 results, wherein both the top line and bottom line missed the respective Zacks Consensus Estimate.
Quarterly earnings came in at $30.2 million or 13 cents per share compared with $13.2 million or 5 cents per share in the year-earlier quarter. The year-over-year increase in earnings, despite lower revenues, was primarily due to lower operating expenses. The bottom line missed the consensus estimate by a couple of cents.
Zayo Group Holdings, Inc. Price, Consensus and EPS Surprise
Zayo Group Holdings, Inc. Price, Consensus and EPS Surprise | Zayo Group Holdings, Inc. Quote
Revenues decreased to $639.1 million from $653.1 million and missed the Zacks Consensus Estimate of $643 million. Operating income improved to $144.7 million from $103.2 million in the year-ago quarter owing to lower operating expenses. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) decreased to $321.2 million from $328.9 million.
Segmental Details
Revenues from the Fiber Solutions segment totaled $228.7 million, up from $203.4 million in the prior-year quarter. It represented 35.8% of the company's fiscal second-quarter revenues.
The Transport segment generated revenues of $169.8 million compared with $166 million in the year-ago quarter. It represented 26.6% of total revenues in the reported quarter.
The Enterprise Networks segment's revenues were $81.6 million, down from $93.9 million and accounted for 12.8% of the company's quarterly revenues.
Revenues at the Zayo Colocation segment were down to $57.5 million from $59.9 million. It represented 9% of fiscal second-quarter revenues.
The Allstream segment generated revenues of $96.7 million, down 22% year over year and represented 15.1% of total revenues in the reported quarter.
The Other segment's revenues were $4.8 million, down from $6.4 million and accounted for 0.8% of the company's fiscal second-quarter revenues.
Liquidity & Cash Flow
As of Dec 31, 2018, Zayo’s cash and cash equivalents were $176.4 million, with long-term debt of $5,902.6 million. Net cash provided by operating activities for the first six months of fiscal 2019 was $472.4 million compared with $456.7 million a year ago. Adjusted unlevered free cash flow was $132.3 million with $231.8 million borrowing capacity under the revolving credit facility.
During the quarter, the company repurchased 12,967,633 shares at an average price of $31.02.
Zacks Rank and Stocks to Consider
Zayo currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include Harris Corporation , Ubiquiti Networks, Inc. and Comtech Telecommunications Corp. (CMTL - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Harris has a long-term earnings growth expectation of 8%. It beat earnings estimates in each of the trailing four quarters, the average positive surprise being 2.9%.
Ubiquiti has a long-term earnings growth expectation of 14%. It beat earnings estimates thrice in the trailing four quarters, the average positive surprise being 11.3%.
Comtech has a long-term earnings growth expectation of 5%. It surpassed earnings estimates in each of the trailing four quarters, the average positive surprise being 252.3%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>