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Equinix Warning Takes Toll on Competition

Stocks in this article: EQIX SVVS TMRK RAX YHOO

NEW YORK ( TheStreet) -- Shares of Equinix (EQIX) suffered the biggest percentage decline in extended trading on Tuesday after the Foster City, Calif.-based provider of global data center services lowered its revenue outlook for the third quarter and full year.

The company cited deeper discounting than expected on long-term contract renewals, its underestimation of churn levels in North America, revenue weakness for a switch and data business it acquired in April.

Equinix now sees revenue of $328 million to $335 million for the September period, compared to its prior range of $335 million to $338 million. Wall Street's current consensus estimate is for revenue of $336.8 million for the period. In the full year, the company expects revenue of $1.215 billion vs. a previous projection of $1.225 billion to $1.235 billion.

The stock was crushed after the close, falling 26% to $78.23. Volume of 4.1 million was more than five times the issue's trailing three-month daily average of around 790,000. The shares had finished the regular session at $105.99, up 4%. Year-to-date, not reflecting the sell-off after the close, the stock was down almost 5%, but it had rallied 40% since scraping a 52-week low of $76.29 on July 7.

Equinix, which boosted its adjusted EBITDA earnings before interest, taxes, depreciation and amortization outlook at the same time, is expected to report its full results for the third quarter on Oct. 26. On a bottomline basis, Wall Street is expecting a profit of 24 cents a share.

The news on Equinix was weighing on shares of its competitors after the bell, including Savvis Inc. (SVVS), whose stock lost nearly 10% to $19.51 on volume of roughly 214,000; Terremark Worldwide (TMRK), which was quoted down 8% at $9.34 on volume of around 20,000; and Rackspace Hosting (RAX), which fell 8.5% to $23.99 on volume of 157,000, according to

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