Cbeyond (CBEY) Get Ready For Stock Price Arctic Winter

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Cbeyond (NASDAQ: CBEY) shares were hit with the Hammer of Thor today, trading off 33% to $15.58. That compares to a 52-week high of $46.51.

The firm did post rough earnings. Revenue moved up 31% for the fourth quarter to $75.9 million, but operating income fell 27% to $2.9 million due to high expenses. Cbeyond sells integrated packages of voice, broadband, and mobile services to small businesses and its customer churn rate rose.

Cbeyond’s CEO said that "the deteriorating economic environment has increased the number of our existing customers who are unable to pay us." With credit conditions as tight as they are access to capital for small business is likely to be exceeding difficult.

Cbeyond expect 2008 to show only modest growth, at least compared to the past. Revenue is expected to be in the $355 million to $360 million up about 26% from 2007.

The company will need a really fine piece of good news to get back on track.

Douglas A. McIntyre