Corvis loss widens in quarter

Forecasts lowered for the full year

layoffs are expected

October 26, 2001|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Corvis Corp., the Columbia-based maker of telecommunications equipment, significantly lowered financial forecasts for the year yesterday and said its losses widened even as revenue increased in the third quarter.

And as the telecom industry continues to struggle, Corvis also said that layoffs are expected. But the company offered few details about the staff reductions.

Chief Financial Officer Anne Stuart said during a conference call that revenue for 2001 is now expected to be about $200 million, down more than 36 percent from Corvis' previous forecasts of between $315 million and $325 million.

Stuart also said Corvis had 1,270 employees at the end of the third quarter, about 5 percent fewer than it had during the previous quarter. She said the company was reducing costs - including facilities consolidation, work force reductions and lowering discretionary expenses - and that Corvis "will share additional details when programs are finalized."

The earnings were released after the stock market closed yesterday.

Corvis reported a net loss of $80.6 million, or 23 cents per diluted share, for the quarter, compared with a net loss of $66.4 million, or 29 cents per share, posted for the corresponding quarter last year.

The number of outstanding shares grew between the third quarter of 2000 and this year.

The company had revenue of $24.2 million in the quarter, which ended Sept. 29, compared with $22.9 million in last year's quarter.

Rick Schafer, a CIBC World Markets analyst who covers Corvis, said the earnings were about what was expected. "Part of it is the industry they're in, and I think part of it is company specific," Schafer said, adding that Corvis needs more customers.

Corvis' adjusted net loss for the third quarter - which excludes goodwill, one-time restructuring and other charges - was $40.3 million, or 11 cents per share. That compares with an adjusted net loss of $23.9 million, or 7 cents per share, posted for the third quarter of 2000.

"I can report to you today that we are positioning ourselves to build a solid long-term business with excellent prospects," the company's president and chief executive officer, David Huber, said during the conference call.

The company's spending has been reduced, and Corvis expects to end the year with about $640 million in cash, Huber said.

Corvis said revenue for the quarter came from deploying equipment through existing contracts with Broadwing Communications Inc. and Williams Communications Inc.

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