Covad Communications' (Nasdaq: COVD) losses for an already disappointing third quarter increased after it announced changes to previously released results.
Share of the broadband services provider closed Tuesday's session up 0.19 to 5.38. The company initially reported results October 17, when it said 9 channel partners were unable to pay up.
The changes to Covad's third quarter numbers involve an additional 5 deliquent Internet Service Provider (ISP) clients who cannot pay their bills. Accordingly, Covad will not recognize revenue for these transactions in its third quarter statement. Covad will include this ISP revenue only after the total of 14 delinquent ISPs have satisfied past due balances.
The entire digital subscriber line (DSL) sector has been hit hard recently as clients have had trouble paying their bills. Both Covad and Copper Mountain (Nasdaq: CMTN) have seen their share prices sag of late.
The revised third quarter for Covad now sees revenue reduced by $10.4 million to $56.3 million compared to the $66.7 million reported on October 17. EBITDA (earnings before interest, tax, depreciation and amortization) losses for the quarter were increased by $4.9 million to a loss of $125.3 million compared to the $120.4 million previously reported.
The company says it will develop plans with each ISP to rectify the situation, while continuing to provide end users with uninterrupted service.
Covad's CEO recently stepped down after the disappointing third quarter.