Cincinnati Bell (CBB) Incurs Loss In Q4, Revenues Miss

Cincinnati Bell Inc. (NYSE:CBB) reported disappointing financial numbers in the fourth quarter of 2017 wherein both the top and bottom line missed the Zacks Consensus Estimate.

On a GAAP basis, quarterly net loss came in at $18.8 million or a loss of 45 cents per share, wider than the net loss of $3.9 million or a loss of 9 cents per share in the year-ago quarter. Further, quarterly adjusted (excluding special items) loss per share was 18 cents, in contrast to the Zacks Consensus Estimate of earnings of 6 cents.

Cincinnati Bell Inc Price, Consensus and EPS Surprise

Quarterly total revenues of $427.1 million were up a whopping 50% year over year. However, the figure lagged the Zacks Consensus Estimate of $466.5 million.

Operating income was $9.8 million compared with $10.5 million in the year-ago quarter. Adjusted EBITDA (earnings before interest, depreciation and amortization) increased 5.7% year over year to $78.4 million in the reported quarter. However, adjusted EBITDA margin was 18% compared with 26% in the year-ago quarter.

Cash Flow

In fourth-quarter 2017, Cincinnati Bell generated $46.6 million of cash from operating activities compared with $27.4 million in the prior-year quarter. Quarterly free cash flow was a negative $15.7 million compared with a negative $70.2 million in the year-ago quarter.

Liquidity

Cincinnati Bell ended 2017 with cash and cash equivalents of $396.5 million compared with $9.7 million at the end of 2016. Total debt at the end of 2017 was $1,747.7 million compared with $1,206.6 million at the end of 2016.

Segmental Results

Entertainment and Communications revenues increased 2% year over year to $197 million owing to a 22% rise in business voice and 17% rise in consumer data revenues. The increase was partially neutralized by a 12% decline in services & other Carrier revenues.

IT Services and Hardware revenues increased a massive 144.3% year over year to $233.3 million. The upside can be attributed to a 98% rise in Professional Services revenues, 38% increase in Unified Communications revenues, partially offest by a 30% drop in Management and Monitoring revenues.

Subscribers Statistics

At the end of 2017, Cincinnati Bell had 0.1837 million residential voice lines, down 8.7% year over year and 0.3331 million business voice lines, up 3.3% year over year. Long distance lines were 0.2936 million, down 7.5%. DSL Internet subscribers were 0.0821 million, down 22.3%. Fioptics Internet customers were 0.2266 million, up 14.7%. Fioptics video subscribers were 0.1465 million, up 6.5% year over year.

Outlook

In 2018, Cincinnati Bell expects revenues to be in the range of $1.200 - $1.275 million and adjusted EBITDA will be within the range of $320 - $330 million.

Zacks Rank

Cincinnati Bell is aregional telecom operator like Windstream Holdings Inc. (NASDAQ:WIN) , Frontier Communications Corp. (NASDAQ:FTR) and CenturyLink Inc. (NYSE:CTL) . The company carries 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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