Savvis (Nasdaq: SVVS) shores Q4 2010 losses as managed service revenues rise

Savvis (Nasdaq: SVVS) continues to benefit from ongoing business customer's adoption of its managed services suite as Q4 revenue rose to $252.7 million, up 4 percent from $219.8 million in Q4 2009.

At the same time, the service provider was able to reduce its quarterly losses to $2.9 million, or 6 cents per share, down from the $5.4 million, or 10 cents per share, loss it reported in Q4 2009.

Both quarterly losses and revenue results surpassed financial analyst expectations of 21 cents per share loss and $258.6 million in quarterly revenue. News of these results drove up Savvis' shares 9 percent.

Driving the revenue growth in Savvis' Managed Services segment, which made up 48 percent, or $89.3 million, of its quarterly hosting revenue was the ongoing adoption of cloud services. Under its managed services umbrella, the service provider offers utility and virtualized services, while cloud solutions include the Savvis Symphony Open, Dedicated and VPDC products.  

The other contributors to Q4 growth were its colocation and core network segments, which made up 52 percent of its hosting revenue and 57 percent of its network revenue. During the three months between September and December 2010, Savvis reported $96.4 million in colocation revenue and $38.4 million in core network revenue from Thomson Reuters and other financial vertical and data center customers.

Throughout the fourth quarter, the service provider continued to win new enterprise customers to rent space in its global data centers, while a seasonal increase in network traffic and a delay in some expected churn.

What's also helping to drive up Savvis' shares 20 percent in the last 10 days is speculation raised in a Reuters report that the service provider has put itself on the auction block

Such rumors of a deal come during a flurry of M&A activity taking in the cloud services and data center space. One of the most high profile deals to take place in the cloud space was Verizon's $1.4 billion deal to purchase data center provider Terremark Worldwide. Earlier, smaller Tier 2 service providers such as TDS Telecom and Windstream also made strategic acquisitions in 2010 of cloud computing and data center providers including Hosted Solutions and TEAM Technologies.  

For more:
- see the earnings release
- Reuters has this article

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