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Cincinnati Bell (CBB) Beats Q3 Earnings, Revenue Estimates

Cincinnati Bell Inc. CBB reported strong financial numbers in the third quarter of 2017 wherein both the top and the bottom line outpaced the Zacks Consensus Estimate.   

On a GAAP basis, quarterly net loss came in at $13.8 million or a loss of 33 cents per share against net income of $16.2 million or 38 cents per share in the year-ago quarter. However, quarterly adjusted (excluding special items) earnings per share were 3 cents which surpassed the Zacks Consensus Estimate of a loss of 2 cents.

Cincinnati Bell Inc Price, Consensus and EPS Surprise

 

Cincinnati Bell Inc Price, Consensus and EPS Surprise | Cincinnati Bell Inc Quote

Quarterly total revenues of $289.2 million were down 7% year over year. However, the figure beat the Zacks Consensus Estimate of $286.3 million.

Operating income was $12.7 million compared with $25.5 million in the year-ago quarter. Adjusted EBITDA (earnings before interest, depreciation and amortization) decreased 1.7% year over year to $76.2 million in the reported quarter. Adjusted EBITDA margin was 26% compared with 25% in the year-ago quarter.

Cash Flow

In third-quarter 2017, Cincinnati Bell generated $33.9 million of cash from operating activities compared with $43.7 million in the prior-year quarter. Quarterly free cash flow was $6.4 million compared with a negative $24.3 million in the year-ago quarter.

Liquidity

Cincinnati Bell ended the third quarter of 2017 with cash and cash equivalents of $43.7 million compared with $9.7 million at the end of 2016. Total debt at the end of third quarter was $1,132.8 million compared with $1,206.6 million at the end of 2016.

Segmental Results

Entertainment and Communications revenues increased 2% year over year to $196.2 million owing to a 22% rise in consumer data and 20% rise in business video revenues. The increase was partially neutralized by a 13% decline in services & other Carrier revenues.

IT Services and Hardware revenues decreased 22% year over year to $96.3 million. The downside was due to a 32% decline in Management and Monitoring revenues, 24% decrease in Professional services revenues, partially mitigated by a 35% rise in unified communications revenues.

Subscribers Statistics

At the end of the third quarter of 2017, Cincinnati Bell had 0.1876 million residential voice lines, declining 8.4% year over year and 0.3240 million business voice lines, increasing 1.6% year over year. Long distance lines were 0.2991 million, reflecting a decline of 7.6%. DSL Internet subscribers were 0.0867 million, down 24.1%. Fioptics Internet customers were 0.2212 million, reflecting an increase of 19.2%. Fioptics video subscribers were 0.1435 million, up 7.6% year over year.

Outlook

In 2017, Cincinnati Bell expects revenues to be in the range of $1.35 - $1.40 billion and adjusted EBITDA to be approximately $305 million (+/- 2%).

Zacks Rank

Cincinnati Bell has a Zacks Rank #4 (Sell). A few better-ranked stocks in this league are TELUS Corp. TU, Telefonica Brasil SA VIV and British Group plc BT, each carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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TELUS Corporation (TU): Free Stock Analysis Report
 
BT Group PLC (BT): Free Stock Analysis Report
 
Cincinnati Bell Inc (CBB): Free Stock Analysis Report
 
Telefonica Brasil S.A. (VIV): Free Stock Analysis Report
 
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