The Aussie Broadband Ltd (ASX: ABB) share price is pushing higher on Wednesday morning after investors overlooked a guidance downgrade.
At the time of writing, the telco’s shares are up 2% to $4.67.
What did Aussie Broadband announce?
Investors have been bidding up the Aussie Broadband share price this morning despite the release of a disappointing update.
In October, Aussie Broadband provided a trading update which included guidance of 53,000 to 60,000 broadband net additions in the second quarter of FY 2022. This comprised 33,000 to 40,000 organic broadband net additions and the migration of 20,000 white label services.
Unfortunately, the company now expects to fall short of this guidance following teething issues with its white label migration.
What is expected in Q2?
According to the release, Aussie Broadband’s sales have remained strong and organic net additions for the second quarter are expected to be at the top end of the guidance range of 33,000 to 40,000 subscribers.
However, taking the shine off this strong performance were those aforementioned teething issues in the early stages of the white label migration. This led to just 8,715 services being migrated in the quarter, well short of the 20,000 target.
Positively, those issues have now been resolved. However, due to the Christmas break, migrations have now concluded for the year and will recommence in mid-January 2022.
Management expects the shortfall to now be migrated in the third quarter of FY 2022. Combined with the originally planned third quarter migrations, it now expects approximately 22,700 migrations to be completed in during the quarter, subject to churn.
End of half expectations
In light of the above, Aussie Broadband expects there to be 492,495 to 494,495 broadband services on its network at the end of the first half.
This is up 10% to 10.9% since the end of the first quarter when the company reported 445,780 active broadband services.
The Aussie Broadband share price is now up 130% in 2021.
The post Aussie Broadband (ASX:ABB) share price higher despite guidance downgrade appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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