May, 2002 : Covad Announces First Quarter Improvements

📅 May 3, 2002 - National communications company Covad Communications Group Inc. (covad.com -> gtt.net) announced on Thursday that it had released its financial results for the first quarter of 2002, highlighting increased revenues and a decreased loss, as well the company's first quarter of positive gross margin.

Revenue for the quarter ending March 31, 2002 was $101.7 million, says Covad, a 42.7 percent increase over the first quarter of 2001 and a 13.6 increase over the quarter ending December 31, 2001. The company says 87 percent of its revenue for the quarter was contributed by its wholesale channel, while 13 percent was contributed by its direct channel.
Covad's network and product costs were $88 million for the quarter, decreasing approximately eight percent from the fourth quarter of 2001 and approximately 34.3 percent from the first quarter of 2001. Covad says its gross margin, revenue minus network and product costs, was 12.7 percent, the first quarter of positive gross margin for the company.
"Importantly, this is the first quarter of positive gross margin for the company where the majority of our markets made enough money to cover the network and product costs in all our markets," says Charles Hoffman, Covad president and CEO. "This shows that our markets are growing, our business plan is on target, and that we are hitting our milestones on the way to becoming free cash flow positive. We are on track to meet that goal by the second half of 2003."
Covad says its operating loss for the first quarter of 2002 was $56.4 million, a 49.8 percent improvement from the fourth quarter of 2001 and a 67.7 percent improvement over the first quarter of 2001.
And the company's net loss for the first quarter of 2002 was $56.8 million, or $0.26 per share. An improvement of 71.4 percent and 77.4 percent, respectively, over the net loss of $198.5 million, or $1.15 per share, for the first quarter of 2001.
"Covad is seeing the benefit of maintaining our tight cost controls,? says Hoffman, ?introducing new services, the expansion of our direct distribution channel and continued support from our wholesale partners. We will continue to have tight disciplines around all business activities with a focus on getting to profitability."