The 10-second takeaway
For the quarter ended March 31 (Q1), Cincinnati Bell beat expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share shrank significantly. GAAP earnings per share shrank to a loss.
Margins contracted across the board.
Cincinnati Bell chalked up revenue of $325.7 million. The seven analysts polled by S&P Capital IQ expected net sales of $307.8 million on the same basis. GAAP reported sales were 10% lower than the prior-year quarter's $362.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.01. The seven earnings estimates compiled by S&P Capital IQ forecast $0.00 per share. Non-GAAP EPS of $0.01 for Q1 were 83% lower than the prior-year quarter's $0.06 per share. GAAP EPS were -$0.19 for Q1 versus $0.05 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 50.3%, 400 basis points worse than the prior-year quarter. Operating margin was 18.4%, 420 basis points worse than the prior-year quarter. Net margin was -11.3%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $303.7 million. On the bottom line, the average EPS estimate is $0.01.
Next year's average estimate for revenue is $1.22 billion. The average EPS estimate is $0.02.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 163 members out of 177 rating the stock outperform, and 14 members rating it underperform. Among 54 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 51 give Cincinnati Bell a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cincinnati Bell is hold, with an average price target of $4.15.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Cincinnati Bell. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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