Cbeyond shares climb after 1st-quarter earnings report
NEW YORK—Shares of Cbeyond Inc. rose Friday after the communications services provider said its first-quarter profit fell more than 60 percent due to a higher income tax expense, but posted higher revenues and affirmed its full-year outlook.
After the end of trading Thursday, Atlanta-based Cbeyond said its first-quarter profit fell to $1 million, or 4 cents per basic share, from $2.7 million, or 10 cents per basic share, in the same quarter last year.
Revenue climbed about 28 percent to $80.5 million from $63 million in the year-ago quarter.
Analysts polled by Thomson Financial expected a profit of 6 cents per diluted share on $80.8 million in revenue.
Cbeyond company said it added 1,633 new customers for a total of 36,674.
The company also reaffirmed its full-year revenue guidance of between $355 million and $360 million. The guidance "assumes a continued challenging economy during 2008," the company said.
Analysts project full-year revenue of $355.5 million.
Friedman, Billings, Ramsey analyst David Dixon raised his price target and reiterated his "Market Perform" rating on Cbeyond in a note to investors Friday.
He said the company has indicated its churn rate -- or the rate of customer attrition -- should slow in the second half of the year.
Dixon raised his price target to $24 from $22.
Separately, Wachovia Capital Markets analyst Jennifer M. Fritzsche was upbeat on the company's performance, saying she expects it to continue launching successfully into new markets during the year.
"The shares likely will be driven by growth, improving profitability, the regulatory/competitive risks and the overall state of the sector and the economy," she said.
Fritzsche raised her 2008 outlook by a penny to 17 cents per share.
Cbeyond shares rose 43 cents, or 2.2 percent, to $20.70 in midday trading Friday. Shares have traded between $13.94 and $46.41 in the last 52 weeks.
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