Earnings reports

Corvis Posts $1.4M Quarter

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
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BenGrahamMan 12/4/2012 | 9:29:01 PM
re: Corvis Posts $1.4M Quarter If I wasn't so frigen buzzed , i would comment on the CC.

dave77777 12/4/2012 | 9:28:55 PM
re: Corvis Posts $1.4M Quarter Hey Belzebutt, little sensitive about those NT comparisons are we? Well, their loss was also about TWO THOUSAND times smaller. I wasn't bashing NT or LU, just pointing out that they sure as hell aren't doing any better than Corv in LH. Yes, Corvis is certainly smaller, which is generally a good thing in these dark telco eq days.

Corvis basically is selling ZERO gear. They're dead
You might want to check their balance sheet and note the 3.5 years of cash there. Then for comparison you might check NT's (or LU's) balance sheet, and figure out how long they'll last without a turnaround. Now who was it that was dead?

Corvis is a niche player. Their niche is dead right now. Most analysts still agree Corvis has the best tech, and they have the cash to wait this out.

LOL Reindeer, I won't comment other than to refer you back to my earlier post.


dietaryfiber 12/4/2012 | 9:28:53 PM
re: Corvis Posts $1.4M Quarter dave7777,

You might not that 850 employees might require something like $350M in revenue to break even. That was if the gross margin on the product was positive. The only problem is in the last several revenue quarters gross margin is negative.

What does this mean? If they get more revenue, they lose money even faster. Time for these guys to buy something that earns revenue and margin with their cash and close up the long haul business.

dietary fiber
cfaller 12/4/2012 | 9:28:52 PM
re: Corvis Posts $1.4M Quarter dave777777777777 wrote:
"I wasn't bashing NT or LU, just pointing out that they sure as hell aren't doing any better than Corv in LH"
For the love of...

First of all, you weren't comparing CORV to LU and NT in long haul. You were comparing CORV to the entire companies of NT and LU. If you wanted to compare LH, you'd have to compare the revenues from the long haul divisions of LU and NT. LU and NT might not break out those revenues, in which case you shouldn't even attempt the comparison. Just out of curiosity, what is it with your fetish for comparing CORV with NT and LU?

And second of all, I don't believe positively comparing the company to LU and NT really impresses anyone. It's quite possible that all three companies will go down the tubes.

dave7777777777777 wrote:
"Most analysts still agree Corvis has the best tech, and they have the cash to wait this out."

What analysts? Name them. How many analysts are still covering CORV? I have to wonder, when was the last time an analyst did a report for CORV?

Is there really a business here? I think it's stupid to simply assume that Corvis has the cash to wait this out- there's no consensus as to how long CORV will have to wait, and even CORV isn't giving any visibility. And if Corvis really is in a waiting mode, why isn't management focused on cash preservation? With a zero sales quarter (essentially), and zero visibility, you'd think the company would be ruthlessly cutting costs and expenses.

Huber is too proud to admit that the company is in trouble. Either that, or he's just milking it to build up a nice nest egg. It's a shame, because even after all this it still might be possible to save the company. Pride goeth before the fall...
Reindeer 12/4/2012 | 9:28:51 PM
re: Corvis Posts $1.4M Quarter Come on Dave.

Share your analyst quotes since you commonly chastise people in these boards for making statements without factual information and now you do the same thing?

You compare losses at Nortel and Lucent to Corvis? That analysis has such little business sense I will not even comment on it.

Fire up your Amiga and 8-inch floppy disk and concentrate on programming and making "logical" relationships between data... two sugars please.
dave77777 12/4/2012 | 9:28:51 PM
re: Corvis Posts $1.4M Quarter You're right, it's not really a fair comparison to say dollar for dollar who is making or losing more. Time to insolvency at current loss rates is a better comparison than dollar amounts.

As for the analysts, I don't have a list in front of me. But do a search on news articles for Corv over the last six months, and you'll find a few articles stating that industry analysts still consider their tech to be superior. More cost cutting would be nice, I was happy to see more layoffs in France, don't particularly like the idea of spending cash on stock. Of course, there are a lot of field trials (supposedly 11) and working on RFPs, so they have to spend SOME money. Outsourcing to Celestica is also a positive in this regard.

optigirl 12/4/2012 | 9:28:51 PM
re: Corvis Posts $1.4M Quarter cfaller:

Spoken like a true sage. I have often found it amusing to listen to those folks who work outside the telecom industry try and make arguments for companies and technologies that they have invested in. LU and NT will be here simply because of their relationships with legacy oriented carriers and government contracts. Does that imply that they do not face bankruptcy? No, they could in fact have to reorganize in some fashion but there is far too much NT and LU gear out there and no way that any major telco is going to forgo that equipment in order to build new networks using crap like CORV.
Reindeer 12/4/2012 | 9:28:50 PM
re: Corvis Posts $1.4M Quarter dave77777, judging by the last group of posts, it is official beyond any reasonable doubt.

You are completely barren of all business sense and need to be reminded to breathe.
corolla 12/4/2012 | 9:28:50 PM
re: Corvis Posts $1.4M Quarter Dave77777,

What are you smoking? Can I have some? $583/employee???? Isn't that a 1-2 day salary for most employees? If all investors had your views, your CORV stock would be trading much higher than $0.60. I suppose the stock is not free falling because investors have already lost their shirts. Regardless of the amount of cash this company has, investors want positive growth. They become very concerned when practically the bulk of CORV's revenues come from their investment activities. Wake up! This is a technology company and not a bank.
lilgatsby 12/4/2012 | 9:28:50 PM
re: Corvis Posts $1.4M Quarter dave77777...

I am confused by your 3.5 years of cash statement.
They have $640m today, and state they will end 2002 with $500m. Even if they double their sales to $2.8m and reduce the goodwill write-offs, they are losing money at a pace that doesn't even come close to supporting 14 quarters...try 6 if they are lucky.

NT & LU have customers that will continue buying to support their sunk cost. CORV doesn't really have anything like this to fall back on, and a quarter with ZERO product sales really speaks to that...

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