Broadwing’s Q1 EBITDA jumps 82%

(Telephony) Broadwing today announced that its first quarter 2001 earnings before interest, taxes, depreciation and amortization (EBITDA) increased 82%, to $155 million, compared to the year previous. Revenues grew to $578 million, 26% better than first quarter 2000, for the company’s fourth consecutive quarter of at least 20% revenue growth.

Excluding nonrecurring items, Broadwing reported a 15 cents-per-share net loss for the quarter, an improvement over the 30 cents-per-share loss it absorbed in first quarter 2000. Broadwing took a 2 cents-per-share charge for nonrecurring items, which consisted primarily of the Cincinnati Bell restructuring.

On an as-reported basis, the 17 cents-per-share loss compares to the 28 cents-per-share loss recorded for the year previous, according to the company.

An ebullient Rick Ellenberger, Broadwing’s CEO, said his company’s financial performance bucks current trends in the telecommunications industry.

“In the 90 days since our last call, this industry has undergone an unprecedented amount of change and turmoil,” he said. “The established carriers are disaggregating their businesses and rapidly losing market share. The emerging providers have hit the cash wall, and almost everyone seems to be lowering guidance and expectations.

“Not Broadwing. We have not wavered one bit from the five-year plan we presented to investors almost two years ago. We continue to execute against that plan, attract talented employees and add profitable market share across all of our lines of business.”

Ellenberger also reported several operational highlights for the quarter, led by Broadwing’s completion of what it is billing as the world’s first intelligent, all-optical-switched network.

“This gives us more speed and capacity available now than any other provider,” he said. “By switching light across the backbone, without the need for electrical-signal regeneration, the Broadwing network is able to operate at levels of efficiency that dwarf any of the legacy networks in operation today.”

Ellenberger said installation intervals for this network drop dramatically compared to legacy networks, because “provisioning is done by keystroke, rather than truck roll.” An example is Bloomberg, for which Broadwing installed circuits in 50 cities in less than 30 days, he said.

Also in the first quarter, Broadwing’s Cincinnati Bell unit became the first local exchange carrier to fully deploy streaming media and video on demand from entertainment providers over its ADSL network, according to Ellenberger.

“Over 45,000 high-bandwidth customers are now the only people in America that can order movies, music videos, TV programs and other streaming media from the likes of Paramount and Warner Brothers, over their telephone lines,” he said.

Ellenberger said the current economic downturn actually is working to Broadwing’s advantage on a couple of different levels.

“The downdraft that has resulted in so much uncertainty across the industry is triggering many of the most talented professionals to flock to Broadwing,” he explained. “Good people want to be with winners, those who have market share and momentum.

“The CLEC shakeout has been a boost to the power of incumbency. In our Cincinnati market, we see fewer competitors and less willingness by customers to trust their mission-critical local communications to unproven start-ups.”

Consequently, Chief Financial Officer Kevin Mooney reaffirmed Broadwing’s guidance for the year, projecting revenue of $2.5 billion and EBITDA between $630 million and $640 million.