Savvis 4Q Loss Narrows, Backs 2011 Revenue Outlook
February 08 2011 - 9:33AM
Dow Jones News
Savvis Inc. (SVVS) said Tuesday its fourth-quarter loss narrowed
and issued a 2011 revenue outlook in line with analysts'
expectations as the data storage provider said it's seeing strength
in its managed services business.
Savvis, a data center operator that provides web hosting,
network and other so-called cloud-computing services, has seen its
stock more than double since July and last week hit its highest
level since late 2007. Investors have been guessing during the
run-up that Savvis could be the next takeover target amid
increasing consolidation within the data-storage industry.
Savvis Chief Executive Jim Ousley has said his company isn't
rushing for a takeover.
For the quarter ended Dec. 31, Savvis posted a loss of $2.95
million, or 6 cents a share, compared with a year-earlier loss of
$5.36 million, or 10 cents a share. Adjusted fourth-quarter
earnings before interest, taxes, depreciation and amortization in
the latest period was $67.8 million.
Revenue increased 15% to $252.7 million, above the average
analyst estimate of $248.6 million on Thomson Reuters.
"Our remarkable fourth quarter results were an appropriate end
to 2010, with good growth in managed services, colocation and
network revenue reported on both an annual and a quarterly basis,"
Ousley said in a statement. "We expect to see a general
continuation of these trends in 2011, with specific strength in our
managed services business."
Savvis shares closed Monday at $32.10 and were inactive in
premarket trading.
Savvis is benefiting in managed services as businesses appear to
be spending more money on updating their software and outsourcing
management of their data centers. This reflects a growing interest
in cloud computing, which enables companies to access computer
servers and data storage over the Internet and internal networks,
allowing them to lower data costs and move content more nimbly.
For 2011, Savvis continues to expect revenue in the range of
$1.03 million to $1.06 million. Analysts had forecast 2011 revenue
at $1.05 million.
Savvis said it expects 2011 adjusted EBITDA of $265 million to
$290 million and total cash capital expenditures of $220 million to
$240 million.
In a research note published last week, William Blair & Co.
analyst Jim Breen said Savvis has one of the best groups of assets
in the managed hosting and cloud infrastructure business.
"We believe that the acquisitions of Terremark and NaviSite are
indicative of the growth potential of the cloud segment," Breen
said. "Large carriers are willing to pay a premium for managed
cloud platforms. This has positive implications for Savvis."
Over the past two weeks, Verizon Communications Inc. (VZ) agreed
to acquire Terremark Worldwide Inc. (TMRK) in a $1.4 billion deal,
and Time Warner Cable Inc. (TWC) signed to buy NaviSite Inc. (NAVI)
for $230 million.
-By Steven Russolillo, Dow Jones Newswires; 212-416-2180;
steven.russolillo@dowjones.com
Navient (NASDAQ:NAVI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Navient (NASDAQ:NAVI)
Historical Stock Chart
From Apr 2023 to Apr 2024