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Corvis Posts $1.4M Quarter

Light Reading
News Analysis
Light Reading
10/24/2002

Corvis Corp. (Nasdaq: CORV) third-quarter revenues dropped 94 percent from a year ago, as sales of the company's long-haul optical switches are virtually nonexistent.

The company's revenues for the quarter ended September 28 were $1.4 million, down from the $24.2 million it reported during the year-ago quarter.

Alarming? Not really. The company cited more than $500 million in cash and investments, so it has plenty of cushion.

The company currently has 883 employees, which puts its monthly revenue per employee (one metric used to measure a company's productivity) at $528.

The situation didn't appear to rattle David Huber, chairman and CEO. "In these difficult times for the telecommunications sector, Corvis continues to make progress," said Huber in the company press release.

But some investors might be asking: "What progress?" Corvis's actual net loss for the quarter was $127.4 million, or 31 cents a share, compared to a loss of $80.6 million, or 23 cents a share, for the year-ago quarter.

The company's revenues came from service contracts with Broadwing Inc. (NYSE: BRW) and France Telecom SA (NYSE: FTE).

Corvis's pro forma net loss for the quarter was $48.4 million, or 12 cents a share, versus a pro forma net loss of $40.3 million, or 11 cents a share, a year ago.

Things will get better, Corvis says. Next quarter, the company says its revenue will "increase sequentially."

Corvis again announced it would cut jobs from its French subsidiaries, affecting a total of 164 jobs out of the 200 workers there by early fiscal 2003. It expects to save $20 million annually because of the restructuring there.

The company also added two new board members: Freeman A. Hrabowski, president of the University of Maryland, and Donald R. Walker, former CEO of computer security firm Veritect. Joseph R. Hardiman, David S. Oros, and Huber are the other board members.

Corvis also announced it would buy back up to $25 million worth of its common stock, about 10 percent of the company's outstanding shares.

Bright spots in the quarter include a complete trial where Corvis successfully upgraded a transoceanic cable, using the gear it acquired from Dorsal Networks. "This is a major milestone in our subsea strategy," Huber says.

Corvis also formed a government solutions unit and announced its first government contract. Huber says the contracts Corvis has are for products, not just for government research and development purposes.

Overall, Huber says Corvis is sitting pretty, even if its earnings don't bear that out. "Our interaction with major quality carriers has never been higher," he says.

— Phil Harvey, Senior Editor, Light Reading
www.lightreading.com

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likebizy
likebizy
12/4/2012 | 9:29:10 PM
re: Corvis Posts $1.4M Quarter
The only thing your story proved is that you know how to use a calculator!
Revenue divided by employees = Revenue per employee.
flanker
flanker
12/4/2012 | 9:29:09 PM
re: Corvis Posts $1.4M Quarter
It's "faze" not "phase" Phil

Didn't know you were the literary type.

I think revenue visibility returns over the next six months


no way.
dave77777
dave77777
12/4/2012 | 9:29:09 PM
re: Corvis Posts $1.4M Quarter
dave77777 - Volunteer Light Reading Editor

Certainly a disappointing quarter, altho on the plus side, they did lose less that LU or NT and have a better balance sheet. I don't particularly like the stock buyback idea, but hey if they're trading below cash why not grab a few back.

Sort of nice to see some Dorsal activity, but I'd really like to see something bubble to the surface that points to some 2003 revenue.

I think revenue visibility returns over the next six months, both for Corv and the rest of the sector. Good times ahead for all?
Reindeer
Reindeer
12/4/2012 | 9:29:07 PM
re: Corvis Posts $1.4M Quarter
UNBELIEVABLE! You see positive signs! Big surprise (not). A piddly $1.4M in service revenues and non-existent optical switch sales and you see positive news.

You will follow them right to the end of the line.
BobbyMax
BobbyMax
12/4/2012 | 9:29:07 PM
re: Corvis Posts $1.4M Quarter
There is no need for all optical core transport switches. The company has cloudy vision and they are not able to see throgh the business climate.
wkdpssh
wkdpssh
12/4/2012 | 9:29:06 PM
re: Corvis Posts $1.4M Quarter
All the revenue was maintenance. You think someone's going to buy from a company that hasn't sold any new product in months?

They lost less than LU and NT? What an accomplishment. They're just a tad bit smaller, eh?
Belzebutt
Belzebutt
12/4/2012 | 9:29:05 PM
re: Corvis Posts $1.4M Quarter
on the plus side, they did lose less that LU or NT

LOL Alert!

Dave7777, you're incredible. This company's revenues are TWO THOUSAND times less than NT and LU revenues, and you even bother comparing the loss?

Corvis basically is selling ZERO gear. They're dead.

The only positive I see is that there is nowhere to go but up. It's pathetic how even now you're bashing companies that actually can sell stuff for a living while you cheer CORV for sitting on their a$$.
newbee2002
newbee2002
12/4/2012 | 9:29:03 PM
re: Corvis Posts $1.4M Quarter
while most of their competitors have either gone belly up or tried to sleep thru the telecom winter? Put the money in bank and wait?

They have 11 field trials this quarter, the subsea trial seems to have gone well. I think I would do the same thing if I were in the management position.
Buttercup
Buttercup
12/4/2012 | 9:29:02 PM
re: Corvis Posts $1.4M Quarter
show me a customer where their kit proves in, cuz I gotta few bridges to unload...

imagine - they're earning more from the cash they have sitting in checking earning <1% than they are from revenues...sounds like SCMR!
mr. man
mr. man
12/4/2012 | 9:29:02 PM
re: Corvis Posts $1.4M Quarter
At this rate, CORV trades for just over 48 times annual sales! It hasn't been this cheap since it was trading at $110!

BTW - The only place to go from here is not only "up", they can also go "out of business".

Still laughing ever since they were worth $30 billion with no sales...

Mr. Man
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