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Technology Stocks : Exodus Communications, Inc. (EXDS) -- Ignore unavailable to you. Want to Upgrade?

To: Dan Hamilton who wrote (3196)	6/21/2001 11:16:58 AM
From: JakeStraw	Read Replies (1) \| Respond to of 3664

Exodus warns of revenue shortfall marketwatch.com SANTA CLARA, Calif. (CBS.MW) - Shares of Exodus Communications plunged 27 percent Thursday after the Web hosting firm lowered its revenue expectations for the second quarter, citing a fall-off in new customers that use its Web-hosting operations. Exodus (EXDS: news, msgs, alerts) sank 68 cents to $1.59, after swooning 21 percent to $2.25 in Wednesday's trading. The stock has been under pressure, falling from $9.33 on May 24, amid fears demand for Exodus data centers would continue to decline while the company's cash position remained tenuous. Late Wednesday, the Santa Clara-based firm said it expects pre-tax cash flow to be "slightly negative" in the second quarter, in contrast to the $5.5 million it generated in the previous quarter, and down substantially from some already lowered expectations. Morgan Stanley analyst Jeffrey Camp, who brought down his projections just a day ago, had forecasted pre-tax cash flow of $25.3 million. Exodus said net cash loss will total an estimated $140 million vs. $118 million in the first quarter. Revenue for the second quarter is now expected to be $315 million, down 9 percent from $348 million in the first quarter, according to Exodus. The goal also falls short of Camp's just revised revenue projection of $342 million in the quarter. Among other reasons for the revenue shortfall, Exodus said orders from existing customers were declining and that it's increasing reserves to $25 million from $10 million, partly to account for certain assets it might sell and to account for "dot-com customer failures." Nipping and tucking The company is expected to post quarterly results on July 24. Additionally, Exodus said it would pay back a $150 million loan, which enables the company to use its assets to retain additional funding if it chooses to. "If available, such asset based financings could provide in excess of $500 million of additional funding for the company," according to a release. After paying down the loan and through cost-containment efforts, the company believes it will be "fully funded" through next year's third quarter, when it expects cash flow to be positive again. For the full year, Exodus expects sales to grow by 65 percent to $1.35 billion. But the goal is lower than some analyst forecasts, even the ones that have already been cut. On Tuesday, Morgan Stanley's Camp lowered revenue estimates by 8 percent to $1.4 billion.