Q2 2010 Earnings Reports: Wireline carriers

Q2 summary wireline carriersHow did the wireline industry perform in the second quarter of 2010? Check here throughout the second quarter earnings report season for full earnings reports from the wireline industry's service providers, equipment suppliers and others.  

A chart of the Tier 1 telcos' performance in Q2 2010 is available here.

Also, don't forget to check out our third quarter 2009, fourth quarter 2009 and first quarter 2010 wrap up pages.


AT&T (NYSE: T)

Earnings Report

Highlights:

  • $0.68 diluted EPS compares with $0.54 diluted EPS in the second quarter of 2009, up 25.9 percent; up 13.0 percent excluding a $0.07 one-time gain from a Telmex Internacional stock transaction
  • $30.8 billion second-quarter consolidated revenues from continuing operations, up $194 million, or 0.6 percent, versus the year-earlier period and up $278 million, or 0.9 percent, sequentially
  • Consolidated operating margin expansion to 19.8 percent, up from 18.0 percent in the year-earlier quarter
  • 3.2 million iPhone activations in second quarter, a company record
  • 32.0 percent growth in wireline consumer IP data revenues driven by AT&T U-verse® expansion; first-ever billion-dollar revenue quarter for AT&T U-verse services
  • 209,000 net gain in AT&T U-verse TV subscribers to reach 2.5 million in service, with continued high broadband and voice attach rates
  • 15.8 percent growth in revenues from strategic business services such as Ethernet, Virtual Private Networks (VPNs), hosting and application services

Related:
AT&T's Q2: IPTV, business services save the wireline day


Bell Canada (NYSE: BCE)

Earnings Report

Highlights:

  • Net earnings applicable to common shares up 70.5% to $590 million
  • Bell revenues up 4.5%; operating income up 30.6%; EBITDA(1) up 3.3%
  • Bell Wireline operating income up 72.8%; Bell Wireline EBITDA up 6% on
  • TV revenue growth of 11.6%, significant operating cost reductions and
  • Stabilizing network access line erosion

Related:
Bell Canada sees earnings uptick Q2


BT (NYSE: BT)

Earnings Report

Highlights:

  • Revenue of £5,006m, down 4%
  • Operating costs reduced by £291m
  • Adjusted EBITDA of £1,399m, up 6% 
  • Adjusted profit before tax of £446m, up 17%
  • Adjusted earnings per share of 4.4p, up 16%, reported earnings per share of 3.7p, up 32%
  • Free cash flow of £415m, up £537m
  • Net debt of £8.9bn, down by more than £1.6bn
  • Fiber roll out passes over 1.5m UK premises in July
  • Full year outlook remains unchanged

Related:
BT holds down operating costs in first quarter to realize 33% net profit


CenturyLink (NYSE: CTL)

Earnings report

Highlights:

  • Increased operating revenues more than 179% to $1.772 billion as a result of the Embarq acquisition.
  • Generated free cash flow of more than $428 million in second quarter 2010, excluding nonrecurring items (free cash flow is defined in the attached financial schedules).
  • Achieved approximately $75 million in operating cost synergies from the Embarq acquisition during second quarter 2010; expect to achieve approximately $330 million in annual run rate synergies by year end 2010.
  • Added more than 29,000 high-speed Internet customers compared to pro forma second quarter 2009 growth of approximately 28,000.
  • Improved access line losses by 22% compared to pro forma second quarter 2009.

Related:
CenturyLink's Q2 revenue decline offset by broadband, Embarq integration


Cincinnati Bell (NYSE: CBB)

Earnings report

Highlights:

  • Second quarter Adjusted EBITDA of $125 million is strongest quarterly performance since 2004 and up $8 million or 7 percent year-over-year driven by increased revenue and continued expense management
  • Completed acquisition of largest Texas-based data center operator CyrusOne for $525 million, increasing the company's data center raised floor capacity to 621,000 square feet
  • Increased earnings guidance for 2010 to reflect strong year-to-date performance and acquisition of CyrusOne

Related:
Cincinnati Bell Q2: Fiber drive soothes its wireline loss pain


Frontier Communications (NYSE: FTR)

Earnings report

Highlights:

Verizon Transaction:

  • Successful completion of transformational transaction with Verizon on July 1, 2010
  • Projected combined annual revenues in excess of $6 billion with $5.2 billion in Frontier common shares issued and $3.5 billion of debt assumed

Frontier Legacy Operations:

  • Continued strong operating income and cash flow margins
  • Second quarter operating cash flow margin of 54%, as adjusted
  • Second quarter dividend payout ratio of 58% of free cash flow

Related:
Frontier line loss impacts Q2 2010 revenue


Global Crossing (Nasdaq: GLBC)

Earnings report

  • 'Invest and grow' revenue of $555 million, a sequential increase of 2 percent in constant currency terms
  • OIBDA of $93 million, a sequential increase of 22 percent in constant currency terms
  • Free Cash Flow use of $13 million, an improvement of $59 million sequentially and essentially flat year over year
  • Significant sequential progress toward achievement of 2010 guidance

Related:
Global Crossing's consolidated revenue takes a Q2 dip


Level 3 Communications (Nasdaq: LVLT)

Earnings report

  • Core Network Services revenue grew 1.3 percent sequentially on a constant currency basis*
  • Consolidated Revenue of $908 million
  • Communications Gross Margin increased to 59.9 percent from 59.1 percent in the second quarter 2009 and 58.8 percent in the first quarter 2010
  • Consolidated Adjusted EBITDA grew to $209 million from $200 million in the prior quarter
  • Sales for Core Network Services increased for third consecutive quarter
  • Wholesale Core Network Services revenue grew 2 percent sequentially*
  • Large Enterprise and Federal Core Network Services revenue grew 4 percent sequentially and 15 percent year-over-year

Related:
Level 3 narrows losses in Q2, but results disappoint analysts


MTS Allstream (Toronto: MBT.TO)

Earnings report

Highlights:

  • Quarterly revenues of $443.1 million, up $1.1 million from Q1 2010
  • Modified quarterly dividend rate on reduced outlook to $0.425 per outstanding common share
  • Updated 2010 outlook to $1.740 billion to $1.790 billion
  • Plans $125 million multi-year FTTH investment in Manitoba

Related:
MTS Allstream makes big FTTX bet while Q2 revenues fall


Qwest (NYSE: Q)

Earnings report

Highlights:

  • Continued progress toward revenue goals
  • Strategic revenue growth of 6 percent year over year driven by demand for enterprise IP
  • Adjusted EBITDA(a) margin improves 200 basis points year over year
  • Generated strong free cash flow
  • Strengthened balance sheet
  • Fiber-to-the-Node passes 4 million households
  • Wireless subscriber base reaches nearly 1 million

Related:
Qwest's Q2 revenue down due to increased landline loss


SureWest (Nasdaq: SURW)

Earnings Report

Highlights:

  • Fifth consecutive quarter of positive free cash flow, at $4 million for six months ended June 30, 2010 compared to $500,000 in same period last year;
  • Broadband segment grew 7 percent year-over-year to $43 million;
  • Telecom revenues fell just 1 percent over Q1 2010, at $17.4 million but is down 15 percent year-over-year

Related:
SureWest boosts broadband in Q2 but telecom revenue continues slide


TeliaSonera (Stockholm: TLSN.ST)

Earnings report

  • Net sales decreased 1.7 percent to SEK 26,964 million (27,424). Net sales in local currencies and excluding acquisitions increased 3.3 percent.
  • The addressable cost base in local currencies and excluding acquisitions decreased 1.9 percent.
    EBITDA, excluding non-recurring items, increased 1.9 percent to SEK 9,214 million (9,043) and the margin to 34.2 percent (33.0). The increase in local currencies and excluding acquisitions was 6.5 percent.
  • Operating income, excluding non-recurring items, decreased to SEK 7,943 million (8,176) as higher EBITDA, excluding non-recurring items, was more than offset by lower contribution from associated companies.
  • Net income attributable to owners of the parent company increased to SEK 5,238 million (4,469) and earnings per share to SEK 1.17 (1.00).
  • Free cash flow increased by 26.5 percent to SEK 3,930 million (3,106).
  • During the quarter the number of subscriptions grew by 2.5 million, of which 1.8 million new subscriptions in the consolidated operations and 0.7 million in the associated companies, totaling 152.4 million.
  • Group outlook for 2010 has been revised. Growth in net sales in local currencies and excluding acquisitions for 2010 is expected to be in line with the first half of 2010. The CAPEX-to-sales ratio is expected to be approximately 14-15 percent in 2010.

Related:
TeliaSonera profits up on lower revenues; IPTV subs bump up 19K


Telus (Toronto: T.TO)

Earnings Report

Highlights:

  • Reported net income and EPS for the second quarter of $296 million and 92 cents, respectively
  • Revenue of $2.4 billion, an increase of 1 percent
  • Free cash flow of $241 million, up 67 percent from a year ago
  • Total customer connections increased by 288,000

Related:
Telus Q2: Cost cutting, video service growth offsets line loss


tw telecom (Nasdaq: TWTC)

Earnings Report

Highlights:

  • Grew total revenue 5% year over year and 2% sequentially, reflecting the highest sequential growth in two years
  • Grew enterprise revenue 6% year over year and 2% sequentially, reflecting the highest sequential growth in two years
  • Grew data and Internet revenue 16% year over year and 4% sequentially
  • Grew M-EBITDA 5% year over year
  • Achieved a 36.1% M-EBITDA margin
  • Delivered $15.2 million of levered free cash flow, representing 5% of revenue
  • Recognized a $227.3 million non-cash income tax benefit
  • Ended the quarter with $486.9 million in cash, equivalents and short term investments

Related:
tw telecom enterprise growth, low churn drove up Q2 results


Verizon (NYSE: VZ)

Earnings Report

Highlights:

  • $9.8 billion in cash flow from operations during 2Q 2010, up 29.8 percent from 2Q 2009; $5.5 billion in free cash flow (non-GAAP), up 76.7 percent.
  • A loss of 7 cents per share, including 65 cents of earnings per share in adjustments, compared with 2Q 2009 EPS of 52 cents.
  • 196,000 net FiOS Internet and 174,000 net FiOS TV customer additions; 3.8 million total FiOS Internet customers and 3.2 million total FiOS TV customers.
  • 11.4 percent increase in consumer ARPU from 2Q 2009; total broadband and video revenues of $1.8 billion, up 20.1 percent from 2Q 2009.
  • 6.2 percent increase in strategic business services revenues; total global enterprise revenues up 0.6 percent from 2Q 2009.

Related:
Verizon's Q2 wireline losses offset by broadband, business service gains


Windstream (Nasdaq: WIN)

Earnings Report

Highlights:

  • Updates financial guidance for acquisition of Iowa Telecom; raises outlook for adjusted free cash flow - expects $770 million to $810 million for full year, resulting in a lower dividend payout ratio of 57 percent to 60 percent
  • Delivers continued improvement in access line trends during quarter with 3.7 percent decline year-over-year on a pro forma basis
  • Generates $198 million in adjusted free cash flow during the quarter
  • Produces $418 million in business services revenues, essentially unchanged year-over-year and representing 44 percent of total revenues on a pro forma basis
  • Adds approximately 14,800 new high-speed Internet customers and about 8,000 new digital TV customers on a pro forma basis

Related:
Windstream Q2: Profit down, but revenue up 22 percent

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