Why 21Vianet Group Dropped


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of 21Vianet Group (NAS: VNET) have dropped by as much as 17% today before recouping most of those losses after the company reported earnings.

So what: First-quarter revenue came out to $55 million, with adjusted net income of $6 million, or $0.12 per share. Those results were right about on target with what the Street was expecting, with 21Vianet topping expectations by a hair.

Now what: CEO Josh Chen said the company increased capacity utilization to 82% to meet demand in the coming quarters, and the company's plans to expand its data centers remains on track. 21Vianet also provided second quarter guidance (in local currency), expecting revenue to be between 364 million yuan to 370 million yuan. For context, the just-closed quarter's revenue was 345.8 million yuan before converting to dollars.

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At the time thisarticle was published Fool contributorEvan Niuholds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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