Forecast Sinks Cogent Shares
The company's stock fell $1.55 (20.92%) to $5.86 this afternoon in response to lower than expected revenue estimates for both the third quarter and the full year 2005.
Cogent reported a net loss of $16.1 million, 47 cents a share, on revenues of $33.8 million for the quarter ended June 30. That compares to a net loss of $22.2 million, or $29 a share, on revenues of $20.4 million for the year-ago quarter. And it's better than what analysts were expecting -- a net loss of 41 cents a share, according to Reuters Research.
Cogent, which claims to be the largest Ethernet service provider in the U.S., is cutting its revenue estimates for the full year 2005 from a range of between $140 million and $150 million to a range of $135 million to $140 million (see Cogent: King of Ports ). Analysts following Cogent anticipated that it would report revenues of about $145 million for all of 2005.
Either revenue scenario, it's worth noting, would be an increase over the company's 2004 revenues, which were $91.3 million.
For its third quarter, Cogent is expecting revenues of between $33 million and $34 million. That, too, was an increase over last year's numbers, but a Wall Street disappointment. Analysts were expecting Cogent to report revenues of $36.6 million for the third quarter.
In all, though, Cogent's business is steadily plodding along as it continues to absorb companies and tap into a growing market of businesses that require Internet access and Ethernet services. The company says it was connected to 9,468 customers as of June 30, up from 4,707 a year ago. Its "on-net buildings" -- buildings physically connected to Cogent's network by Cogent-owned facilities -- were 1,009 as of June 30, up from 930 as of June 30, 2004.
— Phil Harvey, News Editor, Light Reading