Oppenheimer Gives Color On General Communications Following Earnings Report

General Communications GNCMA reported 4Q10 adjusted EBITDA of $50M, slightly below Oppenheimer's/Street estimates of $52M. Full-year 2010 EBITDA of $222M outperformed guidance of $200-204M, as expected. Management issued 2011 EBITDA guidance of $233-238M in line with Oppenheimer's $235M 2011 EBITDA estimate.

Oppenheimer estimates 2011 EBITDA of $235M based on modest 5.1% revenue growth to $685M. This is consistent with 2011 revenue/EBITDA guidance of $685-700M/$233-238M. Management compensation targets released in October 2010 delineate max payouts if GNCMA hits $250M+ in 2011/2012, and $290M in 2013.

Oppenheimer believes capex will run at about ~$100M per year for the next five years, excluding a $79M expenditure for a rural broadband project that could be completed by the end of 2011. Oppenheimer expects FCF of $1+/sh in 2011, and based on target EBITDA in 2013 of $290M, FCF could be more than $2/sh.

Oppenheimer has a Perform rating on GNCMA

GNCMA closed Wednesday at $11.90