Oct 17, 2001 : Broadwing Reports 3Q Financial Results

📅 October 17, 2001 - Broadwing Inc. (broadwing.com) announced yesterday its financial results for the third quarter. Revenues increased 13 percent to$598 million, while earnings before interest, taxes, depreciation andamortization (EBITDA) grew 21 percent to $166 million. The company reporteda net loss of $0.14 per share for the quarter.

Excluding non-recurring gains, the company's loss of $0.15 per sharerepresents a $0.04 per share improvement over a $0.19 per share loss in thethird quarter of 2000. "In the midst of a difficult economy, Broadwingdelivered another quarter of revenue growth and margin improvement," saidRick Ellenberger, Broadwing Inc. president and CEO. "The economy continuedto worsen and as we exited the quarter, we recognized softening across ourbusiness, particularly pronounced in our broadband business, that will makethe remainder of the year challenging. We are preparing our company to meetthese challenges."
At Broadwing Communications, the company's national broadband servicesbusiness, revenues grew 15 percent to $304 million. EBITDA increased23percent to $33 million. During the quarter, the company continued toleverage the unique capabilities of its all-optical switched network tocreate new products and services for customers and set new standards forservice delivery.
The Broadwing Communications all-optical network also received theInfrastructure of the Year Award at the recent Networld+Interop show.
Broadwing Communications continued to refine its focus up-market. During thequarter the company segmented its enterprise markets for effectiveness andefficiency; strengthened its sales leadership team; and exited telemarketingsales, which sold voice services to a low-end customer base. The NationalAccounts program continued to grow, particularly in the media and financialservices segments.
Broadwing's Cincinnati-based businesses reported revenue growth of 12percent and EBITDA growth of 20 percent. In the quarter, Cincinnati Bell wasawarded the coveted JD Power andAssociates award for Local ResidentialTelephone Customer Satisfaction, becoming the first provider tosimultaneously hold two JD Power and Associates Awards.
Broadwing's local-exchange company, Cincinnati Bell Telephone, producedanother quarter of solid financial performance, delivering revenue growth of5 percent to $209 million and EBITDA that grew to an all-time high of $106million. Growth in data services and the continued success of bundledofferings fueled results. Through diligent cost management, revenue peremployee is now approaching $300,000 annually. Cincinnati Bell's EBITDAmargin remained a strong 51 percent.
Cincinnati Bell Wireless recorded another quarter of strong financial andoperational performance. Revenues increased 32 percent to $64 million andEBITDA improved to $20 million, up 163 percent from a year ago.Cincinnati Bell Wireless continues to be the market share leader with 29percent of the Cincinnati market. Average revenue per user (ARPU) remainsvery high with churn near industry lows.
Cincinnati Bell Any Distance, the company's long distance offering,continues to add market share and has captured an impressive 66 percent ofthe residential market and 37 percent of the business market. In total,Other Communications Services businesses increased revenue 15 percent overlast year to $43 million and generated EBITDA of over $7 million.
"In light of the rapidly changing economic environment, I consider our thirdquarter results good," said Kevin Mooney, executive vice president and CFO,Broadwing Inc. "Nevertheless, the indicators we saw at the end of thequarter point toward a softening that will be reflected in our 2001 results.We now expect revenues to grow 15% or better, to $2.35 - $2.38 billion, andEBITDA to grow approximately 26%, to be in the $620 - $630 million range,reductions of 5 percent and 2 percent, respectively, from our originalguidance. We expect our capital spending to decrease 21% versus last year to$670 million, which is $30 million, or 4%, less than our original guidance.We will remain very aggressive in controlling costs and managing our capitalto meet our commitment of becoming free cash flow positive in mid 2002."