Savvis shares jump after revenue tops estimates; full-year forecast gives confidence boost
By APTuesday, July 27, 2010
Savvis shares jump after revenue tops estimates
NEW YORK — Savvis Inc. shares jumped Tuesday after the company’s second-quarter sales topped forecasts.
THE SPARK: The company, which provides information technology services, reported second-quarter revenue after the market close Monday of $221.8 million, up about 1 percent over the same quarter a year ago.
Analysts surveyed by Thomson Reuters expected $220.7 million.
That helped overshadow a wider second-quarter loss, which came in part because of expenses related to a recent acquisition.
The company also provided a full-year revenue forecast for the first time since 2008, which analysts took as a sign of increased confidence.
Savvis said it expects to report revenue of $912 million to $927 million compared with the average estimate from analysts of $913.1 million.
THE ANALYSIS: In a note to clients, RBC Capital Markets analyst Jonathan Atkin upgraded Savvis shares to “Outperform” from “Sector Perform” following second-quarter results.
He said the company’s “recently improved execution under the new CEO warrants serious attention from investors.”
Savvis named James E. Ousley CEO in March, replacing Philip J. Koen, who resigned Jan. 8.
SHARE ACTION: Savvis shares rose $1.27, or 7.4 percent, to $18.35 in afternoon trading.
