Equinix Shares Up 7% As Q3 Results Top View, Boosts 2013 Outlook

(RTTNews) - Shares of Equinix, Inc. (EQIX) surged seven percent in extended trade on Wednesday after the network neutral data center services provider reported results for the third quarter that topped analysts' expectations. Looking ahead, the company provided revenue outlook for the fourth quarter, above Street view, and also boosted its revenue forecast for the full-year 2013.

The company also reported a profit for the quarter that increased 27 percent from last year, reflecting double-digit revenue growth.

Separately, the company announced the appointment of Ihab Tarazi as the new chief technology officer. Tarazi joins Equinix from Verizon, where he served as vice president of enterprise network services. Tarazi began his career at MCI where he held various executive positions in network planning and engineering.

"Equinix delivered its 43rd quarter of revenue and adjusted EBITDA growth, with healthy demand in our target markets as evidenced by the strong interconnection growth, operating margins and firm MRR per cabinet globally," President and CEO Steve Smith said in a statement.

The Foster City, California-based company reported net income of $36.57 million or $0.72 per share for the third quarter, higher than $28.84 million or $0.58 per share in the prior-year quarter.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share for the quarter. Analysts' estimate typically excludes special items.

Revenues for the quarter grew 11 percent to $540.52 million from $488.73 million in the same quarter last year, driven by higher recurring as well as non recurring revenues, and topped nineteen Wall Street analysts' consensus estimate of $539.67 million by a whisker.

Recurring revenues, consisting primarily of colocation, interconnection and managed services, increased 12 percent to $517.0 million, and non-recurring revenues were $23.5 million in the quarter.

Churn for the quarter was 2.5 percent, up from 2.4 percent in the year-ago quarter, in line with prior guidance. The company also surpassed 124,000 cross-connects on a strong global interconnection quarter.

"In addition, we had a number of strategic wins in our cloud vertical, including a multi-site partnership with Microsoft Azure, that leverages our unique global platform, network density, and customer base to enable the hybrid-cloud deployments of the future, further widening the moat around our business," Smith added.

Total operating expenses rose to $158.93 million from $141.37 million in the prior-year quarter, due to higher selling and marketing costs, as well as increased general and administrative expenses.

Looking ahead to the fourth quarter, the company expects revenues in a range of $559 million to $563 million. Analysts expect the company to report revenues of $556.37 million for the quarter.

Capital expenditures for the fourth quarter are expected to be in the range of $190.0 and $210.0 million.

For fiscal 2013, Equinix raised its revenue guidance to a range of $2.145 billion to $2.149 billion from the prior forecast of $2.135 billion to $2.145 billion. Street is currently looking for full-year 2013 revenues of $2.14 billion. Capital expenditures for 2013 are expected to be in the range of $560 to $580 million.

EQIX closed Wednesday's regular trading session at $168.65, up $1.65 or 0.99% on a volume of 2.45 million shares. The stock surged a further $11.85 or 7.03% in after-hours trading.