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Earnings reports

Corvis Stock Slips on Q3 Report

Optical switch and transport equipment maker Corvis Corp. (Nasdaq: CORV) hit the low end of expectations in announcing poor third-quarter earnings, sending its stock into an after-hours slide.

After the market closed tonight, the company reported revenues of $24.2 million for the third quarter. This is down considerably from its second-quarter revenues of $65.0 million and its first-quarter revenues of $84.1 million.

Even though analysts had lowered their expectations, the news still sent Corvis’s stock down $0.30 (14.85%) to $2.02 in after-hours trading on the Island ECN.

Pro forma net loss for the quarter was $40.3 million, or $0.11 loss per share, excluding goodwill and other intangible assets, amortization expense, and equity-based expense, compared with a pro forma net loss of $32.2 million, or $0.09 per share, for the previous quarter and a pro forma net loss of $23.9 million, or $0.07 per share, for the third quarter of 2000.

Reported net loss was $80.6 million, or $0.23 per share, for the current quarter, as opposed to a reported net loss of $821.8 million, or $2.36 per share, for the second quarter, and $66.4 million, or $0.29, for the year-ago quarter.

Analysts had expected lowered revenues and adjusted their guidance. Rick Schafer, an analyst with CIBC World Markets sent out a research note on Oct. 17 reducing his revenue expectations to $25 million from his previous stated expectations of $50 million.

The company was able to reduce its cash burn rate by 46 percent to $57 million from $106 million the previous quarter. Anne Stuart, the CFO, said the company would reduce it even further in the next quarter. Most of the reductions came from previously announced layoffs and also some cuts in research and development costs. The balance sheet reported $715 million in cash and cash equivalents left at the end of the quarter.

For the fourth quarter the company expects revenues between $15 million and $35 million. The company wouldn’t give guidance for 2002 but reiterated that it would continue to reduce operating expenses and cash burn rates.

Corvis only recognized revenue from two customers this quarter. Broadwing Communications Inc. (NYSE: BRW) generated about 70 percent of the revenue while Williams Communications Group (NYSE: WCG) accounted for 30 percent. Qwest Communications International Corp. (NYSE: Q), which had sent in a large purchase order in midyear, did not generate any revenue. The carrier is completing testing of the Corvis gear and isn’t expected to certify it until late in the fourth quarter or even the first quarter of 2002.

“It is definitely not a positive to have revenue pushed out like this,” says Schafer. “But we are relatively confident that Qwest will sign on for the equipment. A lot of carriers are taking a longer time to evaluate products, and Qwest is just on the longer end.”

The company has four other customers that should also start generating revenue in the next year, Telefònica, France Telecom SA, EPIK Communications Inc., and a fourth unannounced carrier.

— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com
cfaller 12/4/2012 | 7:38:22 PM
re: Corvis Stock Slips on Q3 Report gea wrote:

"Although I don't believe Corvis will start selling $200 million worth of gear in the next year or two, I wouldn't rule it out"

We're talking about $350M+ in EARNINGS, not sales. If sales are only in the $200 million range, then a CORV share will still be worth less than a 6 pack. I wonder if CORV shareholders realize this...
MIM 12/4/2012 | 7:38:24 PM
re: Corvis Stock Slips on Q3 Report Lighten up, people, don't get stuck into narrowing the future of opticom to the discussion of the next 2-3 years. Think big. Civilization's demand always grows, justifying "last mile" investments. People wanted hygiene - they got aqueduct. People wanted supply of heat - they got gas pipes. People wanted communication - they got phones. People wanted entertainment - they got cable. There is no doubt one of the civilization's demand will be information (as one of the previous posts has put a philosophical spin on it). At the moment DSL and cable can satisfy even the "advanced demand". But given the expected information traffic when majority of the households will want to have access, I do not see any alternative but fiber for providing appropriate bandwidth. Hence for the next 20-30 years opticom is still a pretty good business to be in.

I could be wrong: dish on the roof proved to be a good substitute for cable, without "last mile" concerns. But anything "wireless" is not really "-less" - it just propagates through surrounding, us included. I don't want to be involved into discussion of "-less" effects on our health, but to play it safe I prefer a "contained propagation" alternative.
gea 12/4/2012 | 7:38:26 PM
re: Corvis Stock Slips on Q3 Report Although I don't believe Corvis will start selling $200 million worth of gear in the next year or two, I wouldn't rule it out. Corvis pretty much dominates a niche that may or may not be important one day. I think that niche probably won't be extremely important, but in the off chance I am wrong, then Corvis will dominate Long Haul carrier's networks. In other words, two years from now, Corvis will either be just about out of business, or they'll be the next Ciena.

As for the previous comment on Juniper, it dopesn't really make a lot of sense. Junpier is a terabit router company exclusively right now. A carrier deploying Juniper will still have to deploy optical transport gear. The only philosophical battle between the optical world and the bigass router folks is concerning the role that optical cross connects might play in a network dominated by OC-48/192 POS pipes (ie, between routers). Some of the router folks seem to believe that the cost per bit of routing will continue to be cheap enough so as to obviate the need for OXCs, except in special niche environments. But you still need transport/DWDM gear to move that traffic in either case.
cfaller 12/4/2012 | 7:38:28 PM
re: Corvis Stock Slips on Q3 Report So, in closing, you don't see CORV stock going to the $20s, but rather at maybe, possibly, if everything goes right (analyst upgrades, record turnaround from recession, huge turnaround in telecom capex spending), a chance at $10? That's half your original projection. You must be a Wall Street analyst with that kind of double talk.

As for my P/E assignment of 20 to CORV, perhaps I was being generous, but even at that high a P/E CORV still doesn't make its numbers...
PantomineHorse 12/4/2012 | 7:38:32 PM
re: Corvis Stock Slips on Q3 Report Is the role of IP terabit routers (JPNR, AVCI) mutually exclusive with CORV equipment or do they complimentary role(s)?

Can someone elaborate on this? How would carriers think about this choice, esp. on near-term (2002) CapEx?

While I'm at it --

Bjboiler wrote:

"I'm currently watching the Jan $5 '02 calls for around .35 cents. If Corv goes to 4-5 dollars in the next few months these could prove to be an opportunity most would want to watch very closely."

Seems we are close to Jan 5 and unless CORV were to suddenly jet towards $4-5, seems like these calls would expire worthless (w/o much chance for an immediate bump-up if say the rise we to occur "late"). Am I missing something here (such as your expectation when we should see $4)?
bjboiler 12/4/2012 | 7:38:33 PM
re: Corvis Stock Slips on Q3 Report Very good points. Corvis should have IPOed around $10, which is where the stock found its primary support on the charts 9 months ago. Their cash burn and profitability will be the most important factors to watch. If earnings come in at about $200 million within 18 months analysts will begin upgrading once again and the economic environment for tech stocks will be at a turnaround. We must totally disregard the first 8 mths. trading and expect a wiser investor will prevail.

As for the current economic situation we are presently in a time similar to that of 82/83 in which the prime was around 15%. And then the economic cash package was 1.7% of GDP, and at the present current cash inflows are close to 2.4% GDP, so history will prove a turnaround. I'm currently watching the Jan $5 '02 calls for around .35 cents. If Corv goes to 4-5 dollars in the next few months these could prove to be an opportunity most would want to watch very closely. The philosophy behind the optical industry will be led by JNPR and they are already in their turnaround. So in closing if CORV even goes to $10 in the next 2 yrs. your still looking at ROI of around 200-300%/yr. Smart play in my book. As for cap. gains learn to live with 'em, don't see them going down too much in the near future.
lucender 12/4/2012 | 7:38:33 PM
re: Corvis Stock Slips on Q3 Report I was really happy with MediaOne, somewhat less happy since AT&T took over (more frequent "loss of block synch" on the modem, not sure why...). We pay $45/month because we have TV cable (was $40 before TPC took over). If you have a dedicated phone line for $20/m and and internet access account for $20/m, well, there's your $40.
But I would never route my local phone service through the cable system, I need some measure of redundancy in telecom.
rjmcmahon 12/4/2012 | 7:38:35 PM
re: Corvis Stock Slips on Q3 Report What makes you think that human psychology has changed sufficiently to move to a new average in the 20's?
________________________________________________

I've wondered this many times myself, "Why are so many paying so much for unproven technology businesses when most economists will tell you that a society's standard of living is directly related to per capita energy consumption?"

I came up with a theory, maybe a bit wacky, but it helps me understand why the discrepancy in PEs.

The single source of all the earth's energy is the sun. All earth organisms owe their existence to the sun's energy, including fossil fuels which represent an indirect storage of the sun's energy. Lately, these fuels have fed the mechanical engines which have enabled the huge recent gains in western society production; production centered around converting the earth's resources (energy) into standard of living increases.

The single source of information is humans. We discover (or create) it. We are responsible for maintaining it as well as distributing it. (Using light to transport information is particularly exciting) We have a vested interest in defining information as valueable lest we lose it. Information that accurately describes and predicts is called knowledge. Knowledge is the most exciting, particularly if it can predict the future price of CORV ;-)

So what we have is a battle of man (information) vs the sun (energy).
And on Wall Street, man wins.

...just a little philosophical perspective and humor during this painful bust cycle.

-Bob
gladysnight 12/4/2012 | 7:38:36 PM
re: Corvis Stock Slips on Q3 Report cfaller wrote:
If CORV stock is going to be in the $20 range in the next 24 months, then that means that earnings/share would have to be between $.75 and $1.00/share. That means about $360 million in EARNINGS in the next 24 months.

Given that Corvis has only seen revenues at about half that, do you really think a $20 stock price within 24 months is plausible? (keep in mind we are never going to see the crazy valuations that were around prior to the crash)
------------------------------------

how come? even you're talking about P/E of 20 (20/1) to 26.7 (20/.75) . . .

Historical average is about 12.

What makes you think that human psychology has changed sufficiently to move to a new average in the 20's?

What specifically about CORV or any other tech or telco stock, makes it worth waiting over 20 years to get your money back? Anyone prepared to bet on constant earnings over 20 years? Maybe you're assuming everyone will make out on the capital gains? Oh yeah, look where that strategy got us . . . .

So, if history really has anything to teach us (an open question for many, I agree) you'd probably be looking at closer to $700 million in earnings before you get anywhere near $20/share again.

And, given what you note about their maximum revenues to date, achieving this over the next 24 months (which are shaping up to be the toughest 24 months since 1932/33) is very unlikely.

IMO.
cfaller 12/4/2012 | 7:38:37 PM
re: Corvis Stock Slips on Q3 Report bjboiler wrote:

"David Huber is not in this for his health...he has managed to build a company that will live well into the next 10 years and I see it's stock price going well into the $20's in the next 2 years"

If CORV stock is going to be in the $20 range in the next 24 months, then that means that earnings/share would have to be between $.75 and $1.00/share. That means about $360 million in EARNINGS in the next 24 months.

Given that Corvis has only seen revenues at about half that, do you really think a $20 stock price within 24 months is plausible? (keep in mind we are never going to see the crazy valuations that were around prior to the crash)
rjmcmahon 12/4/2012 | 7:38:39 PM
re: Corvis Stock Slips on Q3 Report I guess your point is, if we had the mass market on (cable) broadband already, would $50/mo turn a profit.
________________________________________________

That's my understanding. Though one must be clear that the $50/mo is exclusively an *access* charge, i.e. content subscriptions will be separate charges. Bundling a content business with an access business for the WWW seems to have led to failure.

I agree that it will be a challenge to scale the DSL and HFC networks to sufficient bw for next generation offerings and services. Leveraging the existing cable plants and existing business models may prove to be a mistake, though for now that seems like all we've got.

-Bob

PS. A proper residential gateway should hide your home network from the external world, including the cable company.
Belzebutt 12/4/2012 | 7:38:39 PM
re: Corvis Stock Slips on Q3 Report I have @home, and despite the hick-ups (which have not happened lately, knock on wood), you'd have to pry it away from my dead cold hands in order for me to give it up. I've used cable at 3 different locations, and DSL in one location. I've had some problems but they have pretty much all be ironed out for over a year, and these problems would still not make me want to use dial-up instead.

Dial-up "performance" is laughable compared to cable, I hope I never, EVER, have to go back. I'd be ready to pay 2 or 3 times more for the same level of performance I'm getting now (hope nobody from the cable company is reading this - if you are, I'm kidding!). Of course, I'm already paying 1/2 of what you guys are paying since I'm in Canada :) Here they only charge $40 of that colorful Canadian money per month, and that's excluding any promotions.

How they make money on cable internet I don't know, but for this price it's sure as hell worth it, undoubtably.
PantomineHorse 12/4/2012 | 7:38:39 PM
re: Corvis Stock Slips on Q3 Report Can you show which of the cable cos is making any money at this point?

@Home!? Charter!? Haven't many of the broadband (whether DSL/cable) player been whining about their ROI? (Ans. Bad business mgrs)

I guess your point is, if we had the mass market on (cable) broadband already, would $50/mo turn a profit.

Maybe, but once mass demand is created (say if many of my neighbors have broadbarnd), then users could see what I already see -- weak performance that causes me to revert back to more consistent dial-up performance (don't forget cable is shared-media). These clowns have a clue on performance management and they won't until they see a few cancellations. More poor management.

Multi-pc households. Great thought. I have a LinkSys for such a purpose. Worked for awhile, then Charter caught on & wants $10 (maybe $20/mo, don't have the rate card in front of me) so that my LinkSys can get on-line once again. No thanks, I'll do without for now.

Customer Support : No SLAs and atrocious mean wait times (20 minutes, then I'll abandon). For them to run a decent Contact Center, you'd think they might staff with more than 1 person!?

All my issue could be Charter Communications (in my territory), so I don't want to generalize. But a group of us spent much time researching the broadband industry of late & came away with conclusion that broadband access will not ramp up according to "conventional wisdom".

What cable broadband service is succeeding? Certainly, not AtHome. Their bondholders want to "pull the plug" in an attempt to pressure AT&T for a better bid, once the 3.4 mm AtHome users complain loud enough (assuming the service is critically important). I actually think that's a good idea. Something needs to shake up what used to be a promising market, now gone stagnant.


rjmcmahon 12/4/2012 | 7:38:42 PM
re: Corvis Stock Slips on Q3 Report Problem is, none of the cable guys can turn a profit @ $50/mo.
_____________________________________________

Do you have any data to support this? The things I have heard indicate $50/mo will support mass deployment.

The challenge seems to be creating the mass demand. In my opinion, the mass demand is gated behind multi-pc households (and home networks) which are somewhat gated behind mass broadband deployment.

-Bob
bjboiler 12/4/2012 | 7:39:00 PM
re: Corvis Stock Slips on Q3 Report Well, I'm with Poster on this one, anyone reading this site should know what OOO's are and the progression of the industry.

It seems to me that many have lost site of what Corvis' and the future of it's industry hold for the next 5 years. The most important of which is it's leaders. David Huber is not in this for his health... he has managed to build a company that will live well into the next 10 years and I see it's stock price going well into the $20's in the next 2 years. The OOO industry will prove to be one of the most critical growth markets in the next few years, and Corvis' will be one of the leaders. If Huber can continue to manage his cash in a manner which proves profitable, everyone will wish they owned shares before long. As for the competitive nature of this market it will remain difficult until large providers are able to justify costs to consumers and they will in time, however it may take several years. What the future has difficulty predicting is "The last mile" and I would presume some other player will prove to have this key when the first optical computer is invented... Well all, food for thought!
fanfare 12/4/2012 | 7:39:01 PM
re: Corvis Stock Slips on Q3 Report Thanks for clearing that up. Frankly it's hard to tell, due mainly from your apparent lack of knowledge in this area, exactly what your 'points' have been.
poster 12/4/2012 | 7:39:07 PM
re: Corvis Stock Slips on Q3 Report my point is an entire marketing/sales strategy based largely on the concept of OOO is ridiculous. a marketing/sales strategy based on solving those problems is not. if people believe that strictly OOO networks solve all/most carrier issues they are misinformed, as are the people who think an all OEO network does.

for those of you who can't figure it out, as is apparent, I will spell it out clearly:

the moral of the story is specific technology choice is semantics and secondary. primary goal is to solve carrier problems with whatever combination of technology is required.

gea 12/4/2012 | 7:39:08 PM
re: Corvis Stock Slips on Q3 Report Uh, that's not necessarily true. In some networks, the Central Offices are very seriously space and power constrained. In some of these cases, a network provider may be strongly pushed towards a Corvis-like solution, even if all the functionality they would want (like non-blocking wavelength provisionability) isn't there.
In addition, there are up-front costs, and then future costs associated with scaling a network. The OOO people believe that an all-optical solution is far more scalable in terms of COST, so simply dismissing the OOO/OEO debate as merely a "religious" one misses the point. In other words, simply saying that carriers "whant to solve their problems cost effectively" is so obvious that its not really saying anything.
poster 12/4/2012 | 7:39:09 PM
re: Corvis Stock Slips on Q3 Report thanks Einstein. that's my point exactly: do carriers really give a rat's ass about your OOO vs. OEO religious debate. I tend to think not. they just want a solution that provides the functionality they need and is cost effective.

PantomineHorse 12/4/2012 | 7:39:13 PM
re: Corvis Stock Slips on Q3 Report "Oh, and I still haven't found anyone who wants to give up their cable modem, even at $50/month."

Problem is, none of the cable guys can turn a profit @ $50/mo. Pricing needs to rise to a level where it will not cause big players to abandon or lighten up on efforts OR lead to small-timer bankruptcies. That is the discussion currently taking place in Congress -- how to restimulate this industry.

I, for one, will abandon. Since posting several times last week, my frustration with cable internet (my provider) has grown. Service is on the downward trend and my company (Charter Communications) does not have "an entrance" to voice & escalate a chronic complaint.

More & more using backup dial for thruput & reliability.

I will be interesting to see what their CC's ask price will be as my contract runs out next month. Bet they will ASK higher, whereas my BID will be definitely lower.


rjmcmahon 12/4/2012 | 7:39:14 PM
re: Corvis Stock Slips on Q3 Report A key to making money on Tech companies is to buy them when people like Harvey tell you not too.
______________________________________________

The key to making money is finding companies which generate an ROI.

Corvis won't be distributing their cash to equity shareholders, so the arguement to buy them for their cash doesn't hold water.
They'll need to generate postive cash flow. The good news for them is that enough early investors speculated and now they were able to obtain a reasonable sized war chest to live off of for awhile. The bad news is that revenue declines in a startup market indicates trouble, telcos are decreasing their capex spending, DSL/Cable MODEM subscribers are qeustioning spending $50 per month just for faster email, and nobody, but nobody, has brought any new revenue to the table (except for a few porn sites).

-Bob
puddnhead_wilson 12/4/2012 | 7:39:14 PM
re: Corvis Stock Slips on Q3 Report >Are Nortel, Lucent, and Ciena better off? Cash burn seems a lot better at Corvis, actually.

Are you kidding? CORV's burn rate better than CIEN's? CORV in a better cash position than CIEN?

Hard to put much fiath in any of your other comments when you making this kind of glaring mistake.
gea 12/4/2012 | 7:39:14 PM
re: Corvis Stock Slips on Q3 Report A few porn sites? Don't look now, but online porn is a multi-billion dollar industry. Porn pretty much made the VCR what it is today, and who knows? It may end up driving a lot of bandwidth demand.
One would hope, however, that America can find some other apps that are a little more...creative, shall we say.
Oh, and I still haven't found anyone who wants to give up their cable modem, even at $50/month.
fanfare 12/4/2012 | 7:39:16 PM
re: Corvis Stock Slips on Q3 Report Poster,

Why are you referring to OEO conversion based equipment in respect to CORV's marketability to carriers? CORV's demonstrated strength is in OOO.

As for asking if carriers are really interested in OEO capabilities ..... well ... thats a pretty silly question.
poster 12/4/2012 | 7:39:33 PM
re: Corvis Stock Slips on Q3 Report gea,

a wonderful rehash of the obvious. how about providing a little insight - something beyond telling us that you are a sucker to the Corvis PR/marketing people. with all due respect, get to the real questions. do service providers really care that much about OEOs?? it would seem to me that cost is really the issue, not OEO conversions. do you think they would care about the specific technology if all other things were equal. and I find it hard to believe that PM, management capability, and visibility are secondary issues.

just my guess but all of these messages and benfits seem a come from the bubble-era of optical networking. do they really still apply?
especially since essentially all the greenfield applications are non-existent...
gea 12/4/2012 | 7:39:33 PM
re: Corvis Stock Slips on Q3 Report Poster:

Don't get me wrong...I'm not a Corvis "True Believer" in any sense of the word. I actually think most carriers will not want the problems associated with the Corivs architecture. If you are well informed in the optical networking industry, a little digging would probably allow you to find out that I myself ('GEA') have been quite an advocate of the O/E/O approach in many network environments.

BUT, as for transparency, its real importance in most networks will probably be in lowering space/power, and costs (I think protocol transparency is going to be a minor or non issue in backbone networks). The strength of Corvis is that they have at least built a product that is a) consistent with their own marketing hype (believe me, that's rarer than you think), and b)that tackles this set of network issues in a straightforward manner. Oh yeah, and c) equipment that actually seems to work from what I've heard.

If you look at my older posts on this issue, you'll see that I describe Corivs as high risk, but if it pays off it'll pay off big. Like I said before, even if I don't agree with a lot of what Corivs does, I recognize that they seem to do what they claim to do and are self-consistent. That's a hell of a lot more than the vast majority of other "next generation optical networking" companies do, so I'll toss my bread on many waters and just forget about it for a while.
edgecore 12/4/2012 | 7:39:33 PM
re: Corvis Stock Slips on Q3 Report
Interesting, my original questions about transparency was an attempt to understand the issues regarding the protection information in the SONET headers that need to be handed off from metro equipment (possibly from one vendor) off to long haul equipment (from another vendor) and vice versa.

EC

gea 12/4/2012 | 7:39:34 PM
re: Corvis Stock Slips on Q3 Report Corvis recognized one thing a lot of optical network engineers have been pointing out for a while: in order to allow a network to massively scale, you've got to minimize the amount of opto-electronics in the CO. For OXCs, this means avoiding O/E/O whenever possible, and simply moving optical signals between fibers in the optical domain. With current technology, this amounts to doing careful signal power/dispersion/noise budgets and simply using a jumper (or whatever) to connect two OXC ports...no electronics whatsoever. Raman amplification gives you the power budgets to be able to afford to do cross connections like this (as well as go cross country).

Are there problems with this approach? Sure-wavelength blocking, PM, need for centralized network planning...but Corvis at least makes the case that these issues are secondary compared to the scaling issues and economics associated with EDFAs and 3R regenerators.

Hey--I don't even agree with Corvis on a bunch of issues. But they at least are well thought-out and self consistent. And if there's any environment where these are the leading issues, then Corvis is going to dominate that environment.

Let me see if my bid order went through...
edgecore 12/4/2012 | 7:39:35 PM
re: Corvis Stock Slips on Q3 Report >As for Corvis, I'll grant that Raman >amplification is not in and of itself a huge >deal, though they are one of the first to >implement it commercially. I'll also grant that >Corvis didn't invent the concept of optical >transparency.


Can someone please define the term Optical Transparency?

Thanks

EC
gea 12/4/2012 | 7:39:36 PM
re: Corvis Stock Slips on Q3 Report You guys convinced me, as did Harvey Mudd's stupid comments.
I just put a bid in for 1,000 Corvis.
I see it like this...
1) They've got enough cash to survive a big die-off
2) One of the few companies with a self-consistent story and execution
3) Hardware that apparently works, albeit a little weak in software
4) A new edge-box that will compete with Ciena's Core Director: some companies will buy it just so they're not a one-vendor company
5) Upside potential huge (like the risk, I admit)
6) If I'm going to lose money, let it be on something that's at least a little sexy and tackles a niche that isn't just "me too".
7) Harvey Mudd said its certain to flop, and he don't know JACK SQUAT (to quote Chris Farley's motivational speaker).
gea 12/4/2012 | 7:39:37 PM
re: Corvis Stock Slips on Q3 Report As usual, "Harvey Mudd" makes one of his statements that proves he don't know squat about this industry. For instance...

"A close examination of Corvis would reveal that it has nothing new or outstanding technology."

This proves you miss the point. First of all, can you point to ANY company that invented some basic new technology and then placed it into a system and then became successful? Any company out there pretty much buys off the shelf, or MAYBE develops a couple of ASICs that do something kind of cool, but its not like they really invented anything fundamentally new from scratch. That's just not how commercial technology works these days. I mean, it's not like Ciena invented the optical Amplifier or even fiber bragg gratings.


As for Corvis, I'll grant that Raman amplification is not in and of itself a huge deal, though they are one of the first to implement it commercially. I'll also grant that Corvis didn't invent the concept of optical transparency.

But Corvis's strength is in the fact that they developed a well thought-out product line that solves a set of problems that may arguably exist. Even if Corvis is wrong about the market they are basically trying to create, they have at least executed in a way that is self-consistent and makes sense. That's more than most companies can say.

So Harvey, I again ask you: Since you only badmouth companies or claim conspiracy theories are everywhere, what company do YOU work for? I bet you work(ed) for something like Silk Road and so believe that everyone (like Silk Road) is out to cheat VCs and investors.


hey_you 12/4/2012 | 7:39:42 PM
re: Corvis Stock Slips on Q3 Report CORV has lot of cash but so does SCMR, AVCI, etc. So I think CORV may face competition from all these firms.

There has been no revenue growth and I can understand that the telecom economy is to blamed. The question which one of the above firms have been able to acquire more customers and came up with new products during this down period. I think corv has been able to do that. This shows that corv is a good gamble compared to the others.
Sparxe 12/4/2012 | 7:39:47 PM
re: Corvis Stock Slips on Q3 Report Harvey sez

"A close examination of Corvis would reveal that it has nothing new or outstanding technology."

Total BS, CORV already is the defacto industry standard. Nothing NEW. 400gps without regen. Most Carriers are not ready to integrate it.

Nothing outstanding? They set two provisioning records in the last quarter.

A key to making money on Tech companies is to buy them when people like Harvey tell you not too.
Thank you Harvey for keeping the price down to where we can really accumulate...

If you know where I can buy a company with patents , $713,000,000.00 in cash and their facilities all built for $100 mil.. I let you be my partner..

Harvey.... Your name is Mudd

Think
Sparxe
RadioGooGoo 12/4/2012 | 7:39:49 PM
re: Corvis Stock Slips on Q3 Report "A close examination" huh? Would you care to elaborate or do you try to get by with generalizations in life?

"Its disappoing revenues clearly indicate the future of the company. Its total valuation at this time should be no more than $100.00 million dollars or so."

Using your analogy, hell, 95% of the companies out there should "vanish from the radar screen." "Worth $100 million (or so)?" That much? Are you sure you're not being too generous?
Your "close examination" did not reveal to you that CORV has over $700 million in cash???

Hmmmm, you should get together with those CSFB guys....
HarveyMudd 12/4/2012 | 7:39:50 PM
re: Corvis Stock Slips on Q3 Report A close examination of Corvis would reveal that it has nothing new or outstanding technology.

Its disappoing revenues clearly indicate the future of the company. Its total valuation at this time should be no more than $100.00 million dollars or so.
MKTG_Hack 12/4/2012 | 7:39:50 PM
re: Corvis Stock Slips on Q3 Report Gee, Mr. Mudd, you're always such a little ray of sunshine.
LightBeating 12/4/2012 | 7:39:57 PM
re: Corvis Stock Slips on Q3 Report Irsvp,

Let's take another look:

Q: was never expected to generate revenues before Q4-01 (re-listen to previous conference calls). Still, they have a $150M commitment, conditional on product certification.

WCG: had a $200M contract. This has not been renegotiated, as has been stated clearly during the conference call. So mainly, purchase orders have been pushed out. Nothing unusual this year...but it still means that Corvis can expect at least another $100M or so of revenues from WCG in the next year or so.

Mystery customer: I voted for Sprint on the Motley Fool board. It's either them or AT&T, but I know that Huber has had good relationship with Sprint from the Ciena days. We don't know how much revenue this will generate, but it's something above zero!

FT, Telefonica: strong foothold in Europe, what's bad about that?!

Epik: it will be good that they have someone to test their new switch.

Of course, I was disappointed by the $24M, but it's clearly the customers slowing down on capex, and this has been happening for the past 9 months to all other system suppliers. So far, Corvis has not LOST a single customer, and managed to get a few more. In the current environment, this is not a bad accomplishment.

Sure business will suck for another 2, maybe 3 quarters. Are Nortel, Lucent, and Ciena better off? Cash burn seems a lot better at Corvis, actually.

LB
gea 12/4/2012 | 7:40:02 PM
re: Corvis Stock Slips on Q3 Report I kind of agree with Sparxe, but...
Look--Corvis isn't the be-all and end-all that they have tried to claim. Their technology is not super radical or new, and you really do need to deploy Corvis end-to-end for it to make sense. And then, of course, there are going to be some operational issues in terms of wavelength blocking.
That said, Corivs is one of the few companies I know that have thought fairly carefully about what they want to achieve, and about how to accomplish this technologically. It is a self-consistent story that pushes certain optical issues to the forefront and solves them. That's a hell of a lot more than most other companies can claim.
Me? I'm selling tellabs NOW and gonna buy a buttload of corvis, and then forget about it for a year or so. After that, I'll either have nothing or I'll be buying a summer house with the money. Chances of success? 1 in 100. Payoff? 200:1. An excellent, high-risk bet.
Belzebutt 12/4/2012 | 7:40:02 PM
re: Corvis Stock Slips on Q3 Report On the news, the stock barely is down six percent! In addition its gained 20+ percent in the last month.

So you're saying "CORV is up"? I wish I had your optimism, come to think of it my stocks are also up from their all time lows...

Whatever you're having, pass it around, we all need some.
Sparxe 12/4/2012 | 7:40:04 PM
re: Corvis Stock Slips on Q3 Report In the collective haste to beat the shit out of Corv; take a minute to look things over. All the news from the earnings call, was already taken out of the stock long ago. Maybe the analysts don't get it. I agree the $20 mil income is a sickass number. However, they clearly state they have little debt, and have $713 mil in cash... On the news, the stock barely is down six percent! In addition its gained 20+ percent in the last month.

Hellooooo... They are losing $60 mil a quarter and its declining... at that rate CORV has enough money to stay at the table for OVER TWO more YEARS. How many companies can do that? THATs without ONE customer. Does anyone want to wager they can't sell a major project for the next two years.

In Techland there is not a better investment to be found. In this Security and Connection crazy new world ... CORV is money in the bank...

At the stinkin $3.50 CSFB is targeting ..you still gain 30+% .... give me a better stock at that level and I will buy it.. if not ...clam up

CORVs good for $9.50 late spring..

Sparxe Nj
ray_of_light 12/4/2012 | 7:40:09 PM
re: Corvis Stock Slips on Q3 Report They have a great idea and concept but Carriers are just not seeing the demand for it right now. They are not seeing the benefits of changing their infrastructure and network topology to support the system. I think it's a great system for Greenfield Carriers who want a clean and efficient solution out of the box but how many nationwide Greenfield carriers are there - not many. Also I think Carriers may be waiting on other Carriers to make the move. It will be interesting to see if anything comes out of these trials - might start a bit of a snowball effect.
iprsvp 12/4/2012 | 7:40:18 PM
re: Corvis Stock Slips on Q3 Report Let's look @their customers!

Q -- They are going get revenue ONLY
after ceritfication. And certification is going
on forever and there is no gaurantee that @the
end of the day they will end up with a good deal.

WCG -- Willams itself is a house of cards. So
I am not really how much revenue corvis generate
from WCG.

FT -- I hearing about this customer from my last
life and still they can't get anything out of
it. I don't really understand CORV just bcos
they announce field trial and lab trials. If look
at this way EVERY optical company can announce
a field/Lab trial.

I really don't think there products are that good
as they cliam. If they were why would Q would
take sooooooooooo long to say one YES. That means
Q has some other sources may be CIEN or NT. As
all of us already know CIEN rocks @Q. So watch out guys.




poster 12/4/2012 | 7:40:24 PM
re: Corvis Stock Slips on Q3 Report yes, I would say that based on these results, corvis is a house of cards waiting to fall. no guidance for '02 means no gaurantees. people are still building networks, albeit a little slower in the recent months, but corvis has only managed to scrap together 2 paying customers during it's entire existence? that tells me somethings wrong. forget about all the CLECs started in the last 2 years, there should be some business just out of the umpteen incumbents. not ONE of them is willing to upgrade a network with corvis gear? that spells trouble.


Belzebutt 12/4/2012 | 7:40:25 PM
re: Corvis Stock Slips on Q3 Report In light of these results, I think it's time to ask. Is the CORV equipment really cutting edge like the CORV message board claims? Is it possible that a company which is supposedly so far ahead that it's in its own market, can be the worst performer? Have they been pulling wool over people's eyes? Surely if Broadwing was THAT extatic over the equipment other companies would see that too. Something's up...
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