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CyrusOne Has Good Q1-18 - But Fails To Raise Guidance

|About: CyrusOne (CONE)

The consensus projections from Nasdaq for CyrusOne (CONE):

Yearly Earnings Forecasts

Fiscal
Year End
Consensus
EPS* Forecast
High EPS*
Forecast
Low EPS*
Forecast
Number of
Estimates
Over the Last 4 Weeks
Number of Revisions
Up             Down
Dec 2018 3.24 3.28 3.19 10 0 1
Dec 2019 3.76 4.2 3.56 11 0 2
Dec 2020 4.33 4.35 4.3 2 0 0

My spreadsheet for CONE

CONE CyrusOne Q1-18 Q4-17 Q3-17 Q2-17 Q1-17 Q4-16 Q3-16 Q2-16 Q1-16 Q4-15 Q3-15
FFO 110.2 65.6 60.7 58.1 18.5 48.1 48.6 47.5 38.6 31.6 31.5
FFO/share 1.1408 0.7016 0.6678 0.6565 0.2189 0.5802 0.5978 0.60 0.53 0.44 0.43
Norm. FFO 82.2 78.4 71.4 67.9 61.2 56.4 54.8 53.1 45.9 44.2 41.2
Norm. FFO/share 0.85 0.84 0.79 0.77 0.72 0.68 0.67 0.67 0.63 0.61 0.57
LTM N.FFO/share 3.25 3.12 2.96 2.84 2.74 2.66 2.58 2.48 2.31 2.17 2.04
FFO Guidance 3.23 3.23 3.075 3.05 3.00 2.90 2.61 2.54 2.53 2.50 2.13
Share Count 96.6 93.5 88.0 86.5 84.5 83.5 81.3 79.0 72.8 72.6 72.6
Revenue 196.6 180.5 175.3 166.9 149.3 137.4 143.8 130.1 117.8 113.3 111.2
Revenue/share 2.04 1.93 1.99 1.93 1.77 1.65 1.77 1.65 1.62 1.56 1.53
N.FFO/sh to Rev/sh 41.7% 43.5% 39.7% 39.9% 40.7% 41.2% 37.8% 40.6% 38.9% 39.1% 37.2%
Rev/Investments 19.10% 16.05% 16.23% 15.88% 15.23% 17.14% 18.89% 18.40% 17.43% 18.49% 18.83%
Investments 3,464.9 3,840.8 3,656.1 3,523.8 3,243.7 2,601.6 2,433.3 2,214.8 2,084.1 1,827.6 1,733.4
Goodwill 455.1 455.1 455.1 455.1 455.1 455.1 455.1 453.4 453.4 453.4 453.4
Intangible 196.8 203.0 209.7 226.3 223.1 150.2 155.8 160.5 165.5 170.3 175.7
Total Investments 4,116.8 4,498.9 4,320.9 4,205.2 3,921.9 3,206.9 3,044.2 2,828.7 2,703.0 2,451.3 2,362.5
N.FFO/Investments 7.99% 6.97% 6.61% 6.46% 6.24% 7.03% 7.20% 7.50% 6.79% 7.21% 6.97%
Long Term Debt 2,178.3 2,089.4 2,013.7 1,832.5 1,731.8 1,240.1 1,065.7 1,096.2 1,010.3 996.5 964.1
Cap Lease Obligations 15.9 10.1 10.9 11.7 12.4 10.8 11.9 10.9 11.5 12.2 12.8
Lease arrangements 131.3 131.9 133.3 134.0 134.5 135.7 141.9 144.3 147.0 150.0 151.9
Debt + Lease 2,325.5 2,231.4 2,157.9 1,978.2 1,878.7 1,386.6 1,219.9 1,251.4 1,168.8 1,158.7 1,128.8
LT Debt/share 24.07 23.86 24.52 21.18 21.00 14.85 13.11 13.88 13.88 13.73 13.28
Wt Av Cost of Debt 4.34% 4.23% 3.69% 3.74% 3.69% 3.81% 4.03% 3.93% 4.02% 4.07%
Adjusted EBITDA 109.5 104.2 95.9 90.8 80.7 73.0 73.1 69.7 62.7 60.5 59.0
4 times Adj EBITDA 438.0 416.8 383.6 363.2 322.8 292.0 292.4 278.8 250.8 242.0 236.0
Debt+Lease/Adj EBITDA 5.31x 5.35x 5.63x 5.45x 5.82x 4.75x 4.17x 4.49x 4.66x 4.79x 4.78x
Interest Expense 20.8 20.1 17.9 16.5 13.6 11.4 13.8 11.5 12.1 12.0 12.4
Interest Coverage 5.26x 5.18x 5.36x 5.50x 5.93x 6.40x 5.30x 6.06x 5.18x 5.04x 4.76x

FFO was (for those who know BDCs - think of this as the NII). Revenue/share was up (for those who know BDCs - think of this as the TII). The Debt/EBITDA is probably too high to be 'investment grade' - and given that obstacle, the cost of debt is fairly low.

The FFO projection is for the current year three times a year. In the forth quarter, which is reported after the next year has begun, the projection is for the following year.  And that is why the Q4 guidance should be a good jump above the Q3 guidance.

This is the first quarter that lacked a bump in FFO guidance.

Disclosure: I am/we are long CONE.