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Corvis On Track for First Revenues

Light Reading
News Analysis
Light Reading
9/28/2000
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ATLANTA -- Corvis Corp. (Nasdaq: CORV) is about to report its first revenues, proof positive that the company is actually selling and shipping its all-optical switches.

Shyam Jha, vice president of marketing at Corvis, said that Corvis's upcoming report on its third fiscal quarter will contain information about the company's first revenues, obtained in exchange for trial shipments at Broadwing Communications (NYSE: BRW). Corvis will officially announce the results shortly after the fiscal period closes at the end of September.

"It's not smoke and mirrors," said Jha of Corvis's business, which had previously consisted solely of announced but unconfirmed customer wins. "We are shipping product," said Jha. "We can't make stuff fast enough."

In interviews with Light Reading here at Networld+Interop, Corvis officials seemed unusually enthusiastic about the company's sales. In the second quarter results, reported just after Corvis's July 27 IPO, Corvis had no revenues and $100 million in losses (See Corvis Mania Continues). But Corvis officials say they are now prepared to meet or beat Wall Street's forecasts of about $7 million in shipments in Q3 and $250 million in 2001.

"We want people to see our numbers and say, 'Oh my god,' " Jha said.

A good chunk of the cash is expected to come out of three large deals Corvis announced earlier this year -- with service providers Broadwing, Williams Communications Group (NYSE: WCG), and Qwest Communications International Corp. (NYSE: Q) -- that are worth a potential total of $550 million in sales.

Corvis officials said they are on track to realize revenues from their product trials at Broadwing during this quarter, with revenue from its similar deal with Williams expected to post in the fourth quarter. When the numbers are made official, it will likely shed more light on what Corvis charges customers for its switches -- pricing the company does not currently disclose.

Corvis does not expect to book revenue from its contract with Qwest until the second half of 2001, the company said. Broadwing and Williams have each committed to purchase $200 million worth of Corvis gear over the next two years, while Qwest is in for $150 million over the same time period.

-- Paul Kapustka, Silicon Valley bureau chief, and R. Scott Raynovich, executive editor, Light Reading http://www.lightreading.com

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