Zayo to simplify business, releases quarterly results

BOULDER — Zayo Group Holdings Inc. (NYSE: ZAYO) posted second-quarter earnings per share of 13 cents, in line with analyst expectations.

The Boulder-based telecommunications company recorded net income of $30.2 million, which included $36.1 million from the Communications Infrastructure business segment but also a $5.9 million loss from the Allstream segment. Still, second-quarter income more-than doubled from the same period last year, when it was $13.2 million.

Revenue for the quarter totaled $639 million, down 2 percent from the same period last year and missing analyst expectations by $2.9 million.

In November, Zayo announced its intent to split into two public companies: InfrastructureCo and EnterpriseCo. However, that plan for separation has been delayed in favor of a new plan. The company now plans to focus on its core business and treat its network business segment as its crown jewel. Its enterprise segment — which includes operations such as its cloud, zColo and Allstream businesses — will remain part of the company for now but will operate with more independence from the core business. The company said it plans to simplify its execution. While the old Zayo model included fiber solutions, transport, Enterprise, zColo and Allstream, the new model will be streamed down into network zColo and Allstream categories. The company added that as it looked into the feasibility of spinning into two companies, some of the financial burdens and delays in feedback made it less of an option. Zayo is now bullish on simplifying its business and focusing on its network capabilities.

CEO Dan Caruso also addressed speculation that Zayo could be sold.

“The Zayo executive team is fully committed to viewing all alternatives to maximize the value of the company,” he said. “We would meet with a company that appropriately values our company, but we are also focused on shareholder value by executing strategy. Until the situation changes, we will focus on creating shareholder value as a standalone company.”

At the time of publication, Zayo’s stock price was $26.60 per share.

on Facebook on LinkedIn