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Covad Emerges From Bankruptcy To Post a Profit for Fourth Quarter Quelle: Wallstreet Journal By MEI FONG Staff Reporter of THE WALL STREET JOURNAL Covad Communications Group Inc., one of the few high-speed Internet companies to emerge from bankruptcy proceedings, is expected to announce Wednesday that it swung to a profit in its fiscal fourth quarter due to a debt restructuring. The Santa Clara, Calif., company, which sells high-speed links to the Internet via digital subscriber lines and other technologies, said it earned $858.5 million, or $4.69 a share, in the quarter ended Dec. 31, compared with a loss of $907.5, or $5.40 a share, a year earlier. The results include a $1 billion gain resulting from the extinguishing of debt in the bankruptcy process. Excluding the gain, the company said it had a net loss of $175.2 million, or 96 cents a share. Revenue for the quarter increased 62% to $89.5 million from $55.2 million last year. Covad`s results were relatively encouraging in light of the continuing meltdown of the Internet and telecommunications sectors. Covad emerged from bankruptcy proceedings in December, while competitors such as Rhythms NetConnections Inc. and NorthPoint Inc. have not fared as well. For 2001, Covad is expected to post net income of $344.8 million, or $1.94 a share, compared with a loss of $1.4 billion, or $9.47 a share, for the prior year. Excluding the gain, Covad is expected posted a net loss of $689 million, or $3.89 a share. Revenue is expected to have more than doubled to $332.6 million from $158.7 million. Still, the company faces challenges such as regaining customer confidence. "They have to get the cash flow to demonstrate to customers they`ll be around," said Don Sinsabaugh, an analyst at Katan Associates International, a New York-based consulting firm. Covad is expected to say earnings before interest, tax, depreciation and amortization, sometimes called operating cash flow, fell to $386.1 million from $1.2 billion a year earlier. The company said it reduced its quarterly cash-burn rate to less than $60 million from $200 million at the beginning of this year. As of Dec. 31, 2001, it had $293 million in cash and cash equivalents, compared with $870 million in the same period last year. Chief Financial Officer Mark Richman said its cash position is enough to carry the company through the second half of 2003. Covad saw a modest one-year gain of 28% in subscribers to 351,000 from 274,000 in 2000. It is a "small but encouraging" gain in a year that included the bankruptcies of telecommunication carriers and the Sept. 11 terrorist attacks, says analyst Vic Grover of New York investment firm Kaufman Bros. LP. Covad was able to ease out of bankruptcy and erase $1.4 billion in debt through a deal with creditors, which agreed to waive existing debt agreements in exchange for cash and a 15% stake in the company. Covad also negotiated a $50 million loan from shareholder SBC Communications Inc. |
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| aus der Diskussion: | Covad - Himmel oder Hölle |
| Autor (Datum des Eintrages): | Bannerman (27.03.02 10:52:21) |
| Beitrag: | 68 von 149 (ID:5888129) |
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