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Cogent (CCOI) Q2 Loss Narrower Than Expected, Revenues Up Y/Y
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Cogent Communications Inc. (CCOI - Free Report) reported mixed second-quarter 2024 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same. The Washington, DC-based leading Internet service provider reported a top-line expansion year over year, driven by growth in net-centric and corporate business. However, it witnessed a decline in total customer connections during the quarter.
Net Income
The company reported a net loss of $32.3 million or a loss of 68 cents per share against a net income of $1.12 billion or $23.65 per share in the year-ago quarter. The bottom line in the prior year quarter was boosted by a gain on bargain purchase from the Sprint acquisition. Adjusted net loss was reported at 75 cents per share, narrower than the Zacks Consensus Estimate of a loss of $1.31.
Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise
Service revenues rose to $260.4 million from $239.8 million in the year-earlier quarter, driven by solid growth in On-Net and Off-Net revenues. However, the top line missed the consensus estimate of $265 million.
On-Net revenues during the quarter were $140.8 million, up from $127.7 million in the year-ago quarter. The top line beat our estimate of $137.2 million. On-Net customer connections declined 5.9% year over year to 87,574. The company’s Net-centric customer connections declined to 61,736 from 66,711 a year ago.
Off-Net revenues were $111.45 million compared with $101.98 million in the year-earlier quarter. Off-Net customer connections decreased to 32,758 from 38,762 in the year-ago quarter. Net sales missed our revenue estimate of $117.6 million.
Wavelength revenues were $3.62 million in the quarter, up from $1.58 million in the year-ago quarter. Wavelength customer connections were 754, up from 414 in the prior year quarter.
Non-core revenues stood at $4.6 million, down from $8.57 million in the year-ago quarter.
Other Details
GAAP gross profit was $30.24 million, down from $49.8 million a year ago, with respective margins of 11.6% and 20.8%. Operating loss was $47.1 million compared with a loss of $34.6 million a year ago. EBITDA totaled $27.1 million compared with $24.2 million in the year-ago quarter for respective margins of 10.4% and 10.1%. Cogent raised its quarterly dividend by a penny to 98.5 cents per share for the third quarter of 2024. This is the 48th consecutive quarterly dividend increase from the company.
Cash Flow & Liquidity
In the second quarter of 2024, Cogent utilized $22.2 million cash in operations against $82.65 million cash generated in the year-ago quarter. As of Jun 30, 2024, the company had $384.4 million in cash and cash equivalents with $405.17 million of finance lease obligations (net of current maturities).
It is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Motorola Solutions Inc. (MSI - Free Report) provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure services. Motorola carries a Zacks Rank #2 (Buy) at present.
It delivered a trailing four-quarter average earnings surprise of 8.06% and has a long-term growth expectation of 9.63%. In the last reported quarter, Motorola delivered an earnings surprise of 7.64%.
CommScope Holding Company, Inc. (COMM - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 65.22% in the last reported quarter.
It is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. The company has created a niche market for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration.
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Cogent (CCOI) Q2 Loss Narrower Than Expected, Revenues Up Y/Y
Cogent Communications Inc. (CCOI - Free Report) reported mixed second-quarter 2024 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same. The Washington, DC-based leading Internet service provider reported a top-line expansion year over year, driven by growth in net-centric and corporate business. However, it witnessed a decline in total customer connections during the quarter.
Net Income
The company reported a net loss of $32.3 million or a loss of 68 cents per share against a net income of $1.12 billion or $23.65 per share in the year-ago quarter. The bottom line in the prior year quarter was boosted by a gain on bargain purchase from the Sprint acquisition. Adjusted net loss was reported at 75 cents per share, narrower than the Zacks Consensus Estimate of a loss of $1.31.
Cogent Communications Holdings, Inc. Price, Consensus and EPS Surprise
Cogent Communications Holdings, Inc. price-consensus-eps-surprise-chart | Cogent Communications Holdings, Inc. Quote
Revenues
Service revenues rose to $260.4 million from $239.8 million in the year-earlier quarter, driven by solid growth in On-Net and Off-Net revenues. However, the top line missed the consensus estimate of $265 million.
On-Net revenues during the quarter were $140.8 million, up from $127.7 million in the year-ago quarter. The top line beat our estimate of $137.2 million. On-Net customer connections declined 5.9% year over year to 87,574. The company’s Net-centric customer connections declined to 61,736 from 66,711 a year ago.
Off-Net revenues were $111.45 million compared with $101.98 million in the year-earlier quarter. Off-Net customer connections decreased to 32,758 from 38,762 in the year-ago quarter. Net sales missed our revenue estimate of $117.6 million.
Wavelength revenues were $3.62 million in the quarter, up from $1.58 million in the year-ago quarter. Wavelength customer connections were 754, up from 414 in the prior year quarter.
Non-core revenues stood at $4.6 million, down from $8.57 million in the year-ago quarter.
Other Details
GAAP gross profit was $30.24 million, down from $49.8 million a year ago, with respective margins of 11.6% and 20.8%. Operating loss was $47.1 million compared with a loss of $34.6 million a year ago. EBITDA totaled $27.1 million compared with $24.2 million in the year-ago quarter for respective margins of 10.4% and 10.1%. Cogent raised its quarterly dividend by a penny to 98.5 cents per share for the third quarter of 2024. This is the 48th consecutive quarterly dividend increase from the company.
Cash Flow & Liquidity
In the second quarter of 2024, Cogent utilized $22.2 million cash in operations against $82.65 million cash generated in the year-ago quarter. As of Jun 30, 2024, the company had $384.4 million in cash and cash equivalents with $405.17 million of finance lease obligations (net of current maturities).
Zacks Rank & Stocks to Consider
Cogent currently has a Zacks Rank #3 (Hold).
Arista Networks, Inc. (ANET - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. In the last reported quarter, it delivered an earnings surprise of 8.25%. You can see the complete list of today’s Zacks #1 Rank stocks here.
It is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Motorola Solutions Inc. (MSI - Free Report) provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure services. Motorola carries a Zacks Rank #2 (Buy) at present.
It delivered a trailing four-quarter average earnings surprise of 8.06% and has a long-term growth expectation of 9.63%. In the last reported quarter, Motorola delivered an earnings surprise of 7.64%.
CommScope Holding Company, Inc. (COMM - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 65.22% in the last reported quarter.
It is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. The company has created a niche market for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration.