Savvis raises revenue estimate, but stock falls
(Associated Press Via Acquire Media NewsEdge) ST. LOUIS -- Information technology services provider Savvis Inc. raised the low end of its revenue forecast Wednesday, but its shares tumbled along with the rest of the data center sector.
Savvis is now forecasting $917 million to $927 million for the year, up from a previous estimate of $912 million to $927 million. Thomson Reuters says analysts are expecting $917.1 million on average.
The company backed its forecasts for cash capital spending, adjusted earnings before taxes, interest, depreciation, and amortization, and interest expenses. Savvis said it will report its third-quarter results on Oct. 27.
However, Savvis shares fell $2.24, or 10.4 percent, to close at $19.39, tumbling along with shares of other data center service providers. The sector was hit hard after peer Equinix Inc. cut its revenue estimates for the third quarter and full year. Foster City, Calif.-based Equinix said it lost more customers in North America than expected; it also had to cut prices deeply to win long-term contracts.
Savvis shares have traded between $12.36 and $22 over the last year, setting an annual high on Sept. 27. The stock is up 26.6 percent since July 26, when the company reported its second-quarter results.
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