Cincinnati Bell (CBB) has announced first quarter results with adjusted earnings per share (EPS) of 12 cents beating the Zacks Consensus Estimate of 10 cents. Adjusted EPS excludes a tax-related charge associated with the recent federal healthcare reform. Net income (applicable to common shareholders) dipped 23% year-over-year to $20.2 million (or 10 cents a share) due to lower revenue and higher tax and interest expenses.

Revenues fell 1% year-over-year to $323.7 million as a result of the declines across wireline and wireless segments, missing the Zacks Consensus Estimate of $326 million. Adjusted EBITDA of $123 million represents a 9% year-over-year increase.

Results by Segments


Revenues from the Wireline segment dropped 3% year-over-year to $187.7 million. Lower voice revenues (down 10% to $81.1 million) and data services revenues (down 1% to $68.6 million) were partially offset by higher revenues from long-distance and VoIP (up 6% to $25.5 million).

Total local access lines reached 711,700 (down 7% year-over-year), including 637,800 in-territory lines and 73,900 out-of-territory lines. Growth in business access lines in the expansion markets continues to partially offset losses in traditional consumer access lines.

High-speed Internet subscriber base reached 247,600 (including DSL broadband connections of 234,600). Cincinnati Bell’s wireline results now include its Fioptics services that use fiber-to-the-home network to offer entertainment, voice and broadband Internet services. The company exited the quarter with 14,400 Fioptics entertainment subscribers and 13,000 Fioptics broadband customers. 


Revenues from the wireless segment fell 4% year-over-year to $73.2 million on account of lower service revenues that declined 3% to $68.9 million. Equipment revenues decreased 16% to $4.3 million. Growth in data revenues driven by increased smartphone adoption was more than offset by lower voice revenues.

Approximately 6,000 new smartphone activations were registered in the quarter, bringing the total smartphone subscriber base to 89,000. Increased market adoption of these devices has been a primary catalyst behind the 14% year-over-year growth in data ARPU, resulting in year-over-year improvement in postpaid ARPU that reached $49.17.

Cincinnati Bell exited the quarter with 523,300 wireless customers, including postpaid and prepaid customers of 367,800 and 155,500, respectively.

Technology Solutions

Revenues for this segment registered $71.6 million, up 10% year-over-year. Telecom and IT equipment revenues increased 7% to $33.3 million while data center and managed services revenues grew 13% to reach $32.7 million. Utilization rate of the company’s data center capacity increased to 90% in the quarter from 87% reported a year ago.


Cincinnati Bell has reiterated its guidance for 2010. The carrier continues to expect revenues of $1.3 billion, adjusted EBITDA of approximately $460 million and free cash flow of roughly $130 million. The company will remain committed to expand its data center operation and Fioptics platform in 2010.

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