Savvis Puts Together A Strong Quarter

Amidst speculation it might attract buyout interest from larger providers, colo and cloud provider Savvis (news, filings) [a subsidiary of CenturyLink (NYSE:CTL, news, filings)] turned in some pretty nice Q4/2011 results this morning.  Total revenues of $252.7M were up 4% over the third quarter, easily eclipsing the expectations of the market which was looking for less than 2%.  Likewise, the company’s EBITDA of $67.8M and loss per share of $0.06 were quite powerful and exceeded analyst projections.

They picked a good time for it, with the extra attention they have been getting lately — whether they are interested in M&A or not.  Those managed services that are drawing interest, both legacy and cloud, led the way with 10% sequential revenue growth and 32% over the same quarter last year.  Colocation, meanwhile, grew just 1% sequentially and 10% over the same quarter last year.

Interestingly, the company’s network service revenues also surged a bit in the quarter, as 6% sequential growth in their core network revenues was not offset much by declines of just 1% in their sustaining network revenues.  However, this uptick was probably an anomaly fed by seasonal traffic increases and a delay in some expected churn.

Overall guidance for 2011 was for revenue of $1.03-1.06B, adjusted EBITDA of $265-290M, capex of $220-240M, and net cash interest expense of $65M.  The revenue guidance appears to be inline with the street’s expectations.

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Categories: Cloud Computing · Datacenter · Financials