Covad announces operating growth, not financials

(Telephony) DSL provider Covad Communications yesterday announced operating statistics for the first quarter 2001, a move the company said was designed in part to appease investors waiting on fourth-quarter and year-end 2000 earnings.

“It shows that our operational business is in fine shape and is doing nothing but grow,” a Covad spokeswoman said. “We wanted to tell people that.”

Of its 319,000 total lines in service, Covad said there is a 50-50 split between business and residential customers. The line total figure is a 16% increase from the end of 2000, and Covad resellers accounted for 93% of line sales.

The company also said that, as of Monday, it has secured 10,000 orders from customers of now-defunct NorthPoint Communications’ via its Covad Safety Net program. Another 15,000 customer orders have been accepted and are pending. The company said those orders would be provisioned quickly.

“It took us a week to put in 10,000 orders, so it will take another week and a few days for the other 15,000,” she said.

Covad said that, since the end of 2000, it has dropped six of the 19 ISP partners it identified as distressed.

While the operating numbers posted are better than expected, investors are unlikely to get excited until the company’s restructuring concerns are resolved and the delayed earnings are released, said Daniel Ernst, an analyst with Legg Mason.

“Part of the financial model is driven off the operating numbers, so you can slightly infer some of numbers by knowing the operating results,” he said. “But there are issues… that people are more concerned about than operating results.”

A date for fourth-quarter and year-end 2000 earnings has not been announced.

“We’re in the midst of this audit, and it’s very complex,” the spokeswoman said. “We’re working very hard at getting it completed, and we’re going to announce it as soon as we can.”

Covad stock increased sharply yesterday--though slightly--from a Wednesday close of 75 cents to $1. In midday trading today, Covad shares were down 6.25% to 94 cents.