Savvis posts 1st-quarter loss, but shares surge as results surpass expectations

Savvis posts 1Q loss, but shares surge

ST. LOUIS — Computer hosting and network services provider Savvis Inc. on Monday posted a loss for the first quarter, yet saw its shares jump.

Shares rose $2.41, or 14 percent, to $19.99 in midday trading. Earlier the stock traded at a 52-week peak of $20.63.

Savvis lost $11.3 million, or 21 cents a share, in the three months ended in March. That compares with a profit of $600,000, or a penny a share, in the prior-year period.

Analysts polled by Thomson Reuters were expecting a loss of 19 cents per share for the latest quarter, but they generally exclude the cost of equity-based compensation, which Savvis put at $8.5 million. The analysts were expecting $48.5 million in EBITDA, or earnings before interest, depreciation and amortization, which Savvis clearly beat, with $54 million.

Savvis’s revenue fell 2.2 percent to $216.6 million, but also beat analyst expectations at $214.1 million.

Greg Freiberg, Savvis’ CFO, said revenue and EBITDA beat expectations due to strong sales, cost cutting and lower selling, general and administrative expenses. However, he expects sales and marketing spending to rise, which could reduce EBITDA in the current quarter.