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Consolidated Communications Stock Sheds On Q2 Revenue, EBITDA Decline

Consolidated Communications Stock Sheds On Q2 Revenue, EBITDA Decline
  • Consolidated Communications Holdings Inc (NASDAQ: CNSLreported a second-quarter FY21 revenue decline of 1.5% year-on-year to $320.4 million, beating the analyst consensus of $319.86 million.
  • Revenue from Commercial and Carrier revenue declined 1.4% Y/Y to $143.8 million, Commercial and Carrier data and transport grew 1.4% Y/Y to $1.2 million, Consumer declined 2.3% Y/Y to $124.95 million, Voice services fell 5.9% Y/Y to $5.3 million, Video services decreased $2.4 million.
  • Consumer broadband revenue increased 3.7% Y/Y to $2.4 million, Subsidies revenue declined 3.3% Y/Y to $17.5 million, Network access revenue rose 2.1% Y/Y to $31.1 million, and Other products and services revenue increased 4.4% Y/Y to $3.1 million.
  • Adjusted EPS of $0.09 beat the analyst consensus loss of $(0.03).
  • Adjusted EBITDA declined from 4.8% Y/Y to $126.7 million due to declines in voice and special access revenue combined with increased product marketing expense in upgraded fiber build areas partially offset by a $3 million increase in wireless partnership distributions. The margin declined 139 bps to 39.5%.
  • CNSL generated $87.3 million in operating cash flow and held $289.3 million in cash and equivalents.
  • Capital expenditures totaled $119.2 million, reflecting the fiber expansion plan and 76,000 upgrades completed in the quarter.
  • Performance in the first half of the year highlights strong execution on its fiber-first strategy and progress on the company's transformation likely to bring highly competitive, gigabit broadband services to over 70% of its footprint by 2025, CEO Bob Udell stated.
  • Outlook: CNSL sees FY21 capital expenditures between $400 million - $420 million, adjusted EBITDA of $500 million - $510 million.
  • The Q3 revenue consensus is $325.99 million, and the EPS consensus is $0.10.
  • Price action: CNSL shares traded lower by 11.8% at $7.83 on the last check Thursday.

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