Exodus beats estimates, but lowers guidance

(Telephony) Exodus Communications beat expectations for its fourth quarter 2000, but lowered its guidance for the first quarter 2001.

For the quarter ending December 31, Exodus reported revenues of $280.4 million, up 22% over the previous quarter and 177% year over year.

Net loss excluding one-time items was $55.8 million, or 13 cents per share, significantly beating the average analyst estimate by 3 cents per share and a 1 cent improvement over the third quarter 2000.

For all of 2000, Exodus reported revenues of $818.4 million, compared to $242.1 million in 1999. Net loss, excluding one-time items was $221.5 million, or 54 cents per share.

Though the year ended strongly for Exodus, the company forecasted lower than expected earnings for the current quarter. The company expects revenue to be between $365 million and $380 million and a net loss of $140 million to $150 million, or 26 cents to 27 cents per share.

“This outlook is based on the slowdown of our dot com customers and our plan to briefly delay the opening of new GlobalCenter IDCs [part of the GlobalCenter acquisition] so that they be open under exodus standards and eliminate integration risks for these IDCs,” said Marshal Case, chief financial officer for Exodus.

This total is significantly off earlier analyst predictions of a net loss of 17 cents per share, news has not been greeted kindly by Wall Street. Already the company has been downgraded by at least three investment banks and its stock price was down in early trading.

During Exodus’ conference call the company tried to insulate itself from the dot com shakeout, heavily playing up its enterprise base, which made up 57% of the its revenue for the quarter, just shy of the company’s ultimate goal of 60%.

The shakeout, however, is undoubtedly having an effect on the company, which saw its annualized churn grow from under 2% in the third quarter to approximately 3% in the fourth quarter, said Ellen Hancock, Exodus chairman and CEO.

“The increase in this quarter’s churn was primarily due to the loss of dot com customers. We are also seeing evidence of the dot com downturn in receivables, And as noted previously, we are increasing our reserves and allowances in quarter to reflect this concern. We will continue to closely monitor our customer base for warning signs and will continue to take the appropriate action,” she said.