Investor’s Roundup: CyrusOne Inc. (NASDAQ: CONE)

On Friday, Shares of CyrusOne Inc. (NASDAQ: CONE) showed the bearish trend with a lower momentum of -4.97% to $50.29. The company traded total volume of 1,873,995 shares as contrast to its average volume of 987.88K shares. The company has a market value of $5.19B and about 103.24M shares outstanding.

CyrusOne Inc. (CONE) recently declared third quarter 2018 earnings.

Third Quarter 2018 Financial Results:

Revenue was $206.60M for the third quarter, contrast to $175.30M for the same period in 2017, a boost of 18%. The increase in revenue was driven mainly by a 26% increase in occupied CSF and additional interconnection services.

Net loss was $(42.40)M for the third quarter, contrast to net loss of $(55.10)M in the same period in 2017. Net loss for the third quarter included a $(36.60)M unrealized loss on the Company’s equity investment in GDS Holdings Limited (“GDS”), a leading data center provider in China, because of a decrease in GDS’s share price during the quarter. Net loss per diluted common share1 was $(0.43) in the third quarter of 2018, contrast to net loss of $(0.61) per diluted common share in the same period in 2017.

Net operating income (NOI) was $128.90M for the third quarter, contrast to $112.30M in the same period in 2017, a boost of 15%. Adjusted EBITDA was $110.80M for the third quarter, contrast to $95.90M in the same period in 2017, a boost of 16%.

Normalized Funds from Operations (Normalized FFO) was $78.50M for the third quarter, contrast to $71.40M in the same period in 2017, a boost of 10%. Normalized FFO per diluted common share was $0.79 in the third quarter of 2018, equivalent to third quarter 2017.

Leasing Activity:

CyrusOne leased about 15 MW of power and 114.0K CSF in the third quarter, representing $2.20M in monthly recurring rent, inclusive of the monthly impact of installation charges, or about $26.60M in annualized GAAP revenue, excluding estimates for pass-through power. The weighted average lease term of the new leases, based on square footage, is 60 months (5.0 years), and the weighted average remaining lease term of CyrusOne’s portfolio is 59 months (taking into account the impact of the backlog), the longest in the Company’s history. Recurring rent churn for the third quarter was 2.6%, contrast to 0.6% for the same period in 2017.

Portfolio Development and CSF Leased:

In the third quarter, the Company accomplished construction on 185.0K CSF and 18 MW of power capacity across two projects in Northern Virginia and Dallas. CSF leased7 as of the end of the third quarter was 91% for stabilized properties and 86% overall. In addition, the Company has development projects underway in Northern Virginia, Dallas, the New York Metro area, Raleigh-Durham, Phoenix, San Antonio, Frankfurt and London that are expected to add about 393.0K CSF and 103 MW of power capacity.

Balance Sheet and Liquidity:

As of September 30, 2018, the Company had gross asset value totaling about $6.50B, a boost of about 40% over gross asset value as of September 30, 2017. CyrusOne had $2.600B of long-term debt, cash and cash equivalents of $61.00M, and $1.70B available under its unsecured revolving credit facility as of September 30, 2018. Net debt was $2.570B as of September 30, 2018, representing about 28% of the Company’s total enterprise value as of September 30, 2018 of $9.30B, or 5.4x Adjusted EBITDA for the last quarter annualized (after further adjusting to reflect a full quarter Adjusted EBITDA contribution from the Zenium data centers based on September results and the pro forma impact of equity proceeds assuming cash settlement under the forward sale agreement). Available liquidity was $1.920B as of September 30, 2018.

The Company offered net profit margin of 14.00% while its gross profit margin was 64.80%. ROE was recorded as 5.70% while beta factor was 1.02. The stock, as of recent close, has shown the weekly upbeat performance of 0.98% which was maintained at -4.90% in this year.

Grover Beam

Grover Beam has over 14 years experience in the financial services industry giving him a vast understanding of how news affects the financial markets. He is an active day trader spending the majority of her time analyzing earnings reports and watching commodities and derivatives. He has a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.

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