Frontier, Consolidated, Cogent Post 'Solid' Q1 Results, Windstream's 'Mixed," Analysts Say
Frontier Communications and Consolidated Communications posted "solid" Q1 results, as did Cogent Communications, but Windstream's were "mixed," said Well Fargo analysts in notes to investors Wednesday and Thursday on company earnings reports. Frontier's results "showed tangible evidence of operational turnaround…
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with a slowing of customer losses. Revenue was in line with our estimates and EBITDA beat, driven in part by continued focus on cost reductions," they wrote. Consolidated's results "beat our estimates across the board," they wrote. Consolidated "was the only RLEC [so far] to add net broadband subscribers, which we view as a testament to the company’s focus on proactively improving network speeds. With the majority of carrier backhaul contract exposure in the rear view mirror, we believe CNSL is well positioned in this segment going forward. Its [FairPoint] integration is tracking ahead of schedule -- with plans to significantly expand speeds." Cogent's results were "relatively in-line with our estimates although slightly ahead of the Street. ... Constant-currency yr/yr revenue growth of 7% improved 40 [basis points] over Q4’17, although continues to be below CCOI’s longer-term 10-20% guidance given slower growth in the Netcentric business," the analysts wrote. "The Netcentric business did improve in Q1, with traffic growth up 8% sequentially and 35% yr/yr (vs. 29% last quarter) and CCOI remains optimistic this traffic growth will trend upward toward its longer-term level of ~50%." Windstream's results showed a "light" top line, "driven by enterprise weakness," they wrote. "Service revenue was $1.44B (-3.9% y/y) vs. our $1.45B est. (-3.0% y/y), and product sales were $19MM, in line with our est. Consumer revenue was $477MM vs. our $478MM est., enterprise revenue was $746MM vs. our $766MM est., and wholesale was in-line at $184MM. The company lost -2.2K net broadband subscribers and -10.8K digital TV subs vs. our estimates of -3.5K and -8.2K, respectively." The broadband results were "better than feared," they added. At Thursday's close, Frontier's stock price was up 6.5 percent, Consolidated's was down 3.4 percent, Cogent's was up 0.9 percent and Windstream's was down 4.9 percent.