Covad delays annual report

(Telephony) Weakened DSL provider Covad Communications said yesterday it would delay filing its 2000 annual report with the Securities and Exchange Commission so it could resolve “complex accounting issues.”

In February, Covad postponed it fourth-quarter and year-end 2000 earnings call to assess the financial impact of restructuring moves that included 800 layoffs, 260 central office closings and the termination of relationships with several ISP customers that could not meet payments.

One analyst said that filing its annual report on time should not be the company’s primary concern.

“They are granted some latitudes within [SEC] quarterly filings,” said Ron Westfall, senior analyst at Current Analysis. “But, intrinsically, the biggest worry is Wall Street dolling out punishment to the point where they’re delisted.”

Indeed, as of mid-afternoon trading today, Covad’s stock had dropped more than 30% to 71.88 cents. Stocks that trade for less than $1 for an extended period risk being delisted by Nasdaq. Since March 2000, the company’s stock has lost 98% of its value.

A spokeswoman with the SEC said that she could not comment on particular company filings, but that the commission judges delays on a case-by-case basis.

In yesterday’s filing, Covad said it expects higher net losses in operating and interest expenses for 2000 compared to 1999 but also expects higher revenue than last year.