Savvis Shares Soar on Earnings Report
May 3rd, 2010 By: Rich Miller
Shares of Savvis are more than 15 percent higher in early trading after the managed hosting and cloud computing company reported revenues that exceeded Wall Street’s expectations.
For the first quarter, Savvis posted a net loss of $11.3 million, or 21 cents a share, while the analyst consensus was for a loss of 19 cents a share. But revenue of $216.6 million beat Wall Street estimates of $214.1 million. As of 11 a.m., Savvis (SVVS) was trading at $20.29 a share, up $2.71 on the session, or about 15.3 percent.
In an earning call with analysts, Savvis executives highlighted two recent wins: a five-year deal with an online media company valued at $12 million, and an expansion of its relationship with one of its most important customers, Thomson Reuters. Savvis said the agreement with Thomson Reuters has been expanded to provide hosting services for the new Elektron data distribution service. Investors also seemed to like Savvis’ continuing focus on improving the productivity of its sales force.
New CEO Jim Ousley asserted that the investment community hasn’t fully appreciated Savvis’ competitive position in the lucrative market for low-latency trading and related managed services for the financial community.
“I think sometimes investors miss the strength Savvis has in the financial vertical,” said Ousley. “Savvis is a vital component of the fabric that connects the global financial industry. We have an enviable and defensible position serving the financial community. We should not be underestimated.”
Ousley said the company was also refocusing its communications effort. “We’re doing great things as Savvis, but that message hasn’t always gotten through to you,” he said.