Cincinnati Bell's Q2 results get boost from data center service gains

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Cincinnati Bell's (NYSE: CBB) bet on data center services continues to be a saving grace for the company. The service provider reported that Q2 2011 revenues were $368 million, a 9 percent increase over Q2 2010, a factor it attributes to an 83 percent increase in data center revenue and a 22 percent increase in IT Services and Hardware sales. This is a continuation of a theme that Cincinnati Bell saw in Q1 2011.

Likewise, the ILEC's operating income rose 11 percent from Q2 2010 to $78 million, while net income of $14 million resulted in diluted earnings per share of 5 cents, up from 3 cents per share in Q2 2010.

"With the growth in our data center colocation business combined with the recent launch of our 4G and IPTV platforms, the company is poised for continued success in the second half of 2011," said Jack Cassidy, president and CEO, Cincinnati Bell.

As expected, Cincinnati Bell's traditional wireline revenues slid from $187 million in the second quarter of 2010 to $185 million, but were up from the $184 million it reported in Q1 2011. During the quarter, access line loss was 6.92 percent, lower than the 7.11 percent loss from the same period in 2010.

While its traditional voice line business continues to decline, Cincinnati Bell did make continued progress with a number of its next-gen wireline services, including its Fioptics Fiber to the Home (FTTH) and TV service offerings.

In the second quarter, the service provider passed an additional 7,000 homes and businesses with FTTH, reaching a total of 90,000 units, but also added 3,000 new Fioptics entertainment subscribers.

Cincinnati Bell isn't resting on its laurels, however, as it looks to expand its FTTH footprint and even enter into new ventures, including energy delivery.

To help scale the entertainment business, the service provider plans to offer IPTV over its existing copper lines via VDSL2 and continuing to roll out FTTH incrementally with plans to pass 80,000 homes in Cincinnati and Northern Kentucky this year.

For more:
- see the earnings release

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