Terremark Worldwide (TMRK) announced fiscal first-quarter loss of 25 cents per share that was wider than the Zacks Consensus Estimate of loss per share of 3 cents per share. The company reported net loss of $15.4 million, compared to a net profit of $1.7 million in the year-ago quarter due to higher operating expenses (includes approximately $10.3 million loss in early extinguishment of debt).
Consolidated revenues of $65.8 million were near the high-end of the company’s guidance for the quarter, marking a 17% year-over-year growth. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased 52% year over year to $16.7 million.
The company added 46 new customers during the quarter, stable sequentially, taking its total customer base to 1,114 at the end of the quarter. Total new contract bookings registered in the first quarter were $29 million, representing a decline from previous quarter’s $31.8 million.
Cross-connects billed to customers reached 8,456, growing 17% from the prior-year quarter. Additionally, total colocation space utilization increased to 28.3%, from 24.8% in the previous quarter. Utilization for build-out colocation space also increased sequentially to 60.5%.
The company has released its financial targets for the second quarter and fiscal 2010. Revenues for the second quarter are projected to range between $68.0 million and $70.0 million with adjusted EBITDA of $17.0 to $19.0 million. The company has reaffirmed its revenue guidance for fiscal 2010, which is expected between $290 million and $300 million. Adjusted EBITDA for fiscal 2010 is projected between $80 million and $85 million.
Terremark remains a key player in the IT infrastructure solutions market with a vast portfolio of premium products and services, wide geographic coverage and a diversified customer base. The company continues to broaden its data center space to handle increased demand, especially from federal government customers.
Leveraging the newly constructed 130-mile long fiber optic network, Terremark has recently increased carrier connectivity at its NAP (network access point) of the Capital Region (NCR) data center facility in Virginia. The company is further expanding capacity at the NCR facility by constructing a second data center, which is expected for completion by late 2010. Terremark has already booked contracts for 30% of the available space for this facility, mostly derived from federal customers.
We believe the company’s industry leading product/service portfolio, coupled with a differentiated execution strategy, uniquely positions it to leverage attractive market trends for managed hosting and colocation services.
While we are encouraged by the company’s ongoing expansion initiatives and healthy contract booking levels supported by the robust demand for its services, our primary concern remains the highly leveraged balance sheet as most of the expansion initiatives are being funded by debt financing.
Read the full analyst report on “TMRK”
Zacks Investment Research
Uncategorized