UPDATE: D.A. Davidson Reiterates On Lumos Networks Following Solid Q3 Earnings

In a report published Monday, D.A. Davidson analyst James G. Moorman reiterated a Buy rating on Lumos Networks Corp. (NASDAQ: LMOS), and raised the price target from $18.00 to $19.00.

In the report, D.A. Davidson noted, “LMOS reported revenues and EBITDA roughly 2% better than our estimates. Revenues were $50.5 million, down 2.2% year-over-year (YoY), and 1.7% above our $49.7 million estimate. LMOS' growth area – data revenues – declined 0.8% sequentially due to a 5.9% sequential decline in Fiber to the Cell (FTTT). The decline in FTTT was largely due to a credit for a service outage, but this most likely would not have occurred if Project Ark was in place. Residential and Small Business revenues fell 11.9% YoY and 3.4% sequentially. Access revenues were better than expected and were up 23.1% sequentially and 16.1% YoY. Gross margins were 80% and SG&A was flat sequentially after removing a one-time benefit of $10.2 million. EBITDA was $22.7 million, better than our $22.2 million estimate. EPS of $0.45 compared to our estimate of $0.13 and $0.11 last year. We estimate EPS excluding the one-time benefit of $10.2 million at $0.17.”

Lumos Networks closed on Friday at $16.02.