Cogent Earnings: Moving Parts Following Sprint Wireline Acquisition Clouding Results

Cogent’s results remain difficult to assess. Reported sales and profits have little meaning, as metrics for Sprint’s wireline business are now incorporated within Cogent’s legacy reporting lines. As a reminder, T-Mobile is paying Cogent $700 million over the next few years to take Sprint wireline, which was burning cash and seeing sales declines. Management remains enthusiastic about the opportunities it will have with the Sprint infrastructure and customer base, but in the near term, sales and EBITDA will be under pressure as Cogent abandons unattractive revenue and gradually realizes cost synergies.