Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Allegiant Travel Co. (NASDAQ: ALGT) beat estimates with soaring Q1 revenues, bucking the airline trend.
• Apache Corp. (NYSE: APA) Q1 profits doubled but fell short of expectations.
• Avon Products Inc. (NYSE: AVP) posted solid Q1 results despite negative operational cash flow.
• Centex Corp. (NYSE: CTX) posted a Q4 loss well below analyst estimates.
• Cigna Corp. (NYSE: CI) profits plunged in the first quarter on litigation charges.
• Countrywide Financial Corp. (NYSE: CFC) posted another big loss, way off estimates of a small profit.
• Deutsche Bank AG (NYSE: DB) posted its first quarterly loss since 2003 on write-downs.
• Gardner Denver Inc. (NYSE: GDI) beat Q1 expectations and raised its outlook for the year.
• International Paper Co. (NYSE: IP) fell short of Wall Street's Q1 earnings estimates.
• Jacobs Engineering Group Inc. (NYSE: JEC) beat Q1 estimates and offered fully-year guidance.
• KBR Inc. (NYSE: KBR) Q1 profit more than doubled on arbitration benefit.
• MasterCard Inc. (NYSE: MA) topped analysts' expectations as Q1 profits more than doubled.
• Office Depot Inc. (NYSE: ODP) Q1 profits tumbled 55% but still beat analysts' estimates.

MOST NOTEWORTHY: CBS Corp., Thornburg Mortgage and DiamondRock Hospitality were among today's noteworthy downgrades:

• CBS Corp. (NYSE: CBS) was downgraded to Market Perform from Outperform at Wachovia, citing the weak ad environment and potential M&A strategy to acquire growth, which will limit upside near-term.
  
• Thornburg Mortgage (NYSE: TMA) was downgraded to Underperform from Outperform at Friedman Billings, which said the recent capital raise and related transactions result in 95% dilution, and questions how shares will trade when 2.9B restricted common shares are registered and start trading in mid- May.
  
• DiamondRock Hospitality (NYSE: DRH) was downgraded to Neutral from Outperform at Baird following the company's reduced guidance.

OTHER DOWNGRADES:

• Savvis Inc. (NASDAQ: SVVS) was downgraded to Equal Weight from Overweight at Lehman following the company's Q1 report and guidance.
  
• Memc Electronic Materials (NYSE: WFR) was downgraded to Neutral from Overweight at J.P. Morgan, who cited high Street expectations and a very tight capacity expansion schedule over the next few quarters.

MOST NOTEWORTHY: Air France, BHP Billiton, AstraZeneca, Broadcom and Savvis were today's noteworthy downgrades:

• Goldman removed shares of Air France (NYSE: AKH) from its Conviction Buy List due to the increase in the price of fuel and the possibility of an economic slowdown.
  
• Goldman downgraded BHP Billiton (NYSE: BHP) to Neutral from Buy and removed the stock from its Pan-Europe Buy List due to valuation.
  
• Merrill Lynch downgraded shares of AstraZeneca (NYSE: AZN) to Sell from Neutral to reflect increased competition from generic-drug makers, a poor pipeline and slow earnings growth.
  
• Wachovia downgraded shares of Broadcom Corporation (NASDAQ: BRCM) to Hold from Buy to reflect valuation and the company's lower than expected Q3 results. Shares were also lowered to Hold from Buy at Deutsche Bank.
  
• Stanford lowered Savvis (NASDAQ: SVVS) to Hold from Buy and notes that the company's Q3 results and Q4 revenue guidance brings the company's 2007 revenue outlook $15M below the consensus, and advises investors to remain on the sidelines. The firm believes the company's strategy is sound, but that its execution has been slow.

OTHER DOWNGRADES:

• Blockbuster (NYSE: BBI) and Akzo Nobel (OTC: AKZOY) were downgraded to Neutral from Overweight at JP Morgan.
  
• Friedman Billings downgraded the E&P sector, including Brigham Exploration Company (NASDAQ: BEXP), Mariner Energy (NYSE: ME) and Nobel Energy (NYSE: NBL) to Market Perform from Outperform.
  
• Baird downgraded Plantronics (NYSE: PLT) to Neutral from Outperform.
  
• Goldman downgraded Boston Scientific (NYSE: BSX) to Neutral from Buy.

Evidence of a successful product transition for Savvis Inc (NASDAQ: SVVS) should come out in its October earnings conference call. The data-center company had a nice run post-restructuring, but I blogged as the stock was hitting $50 per share that it was worth taking some money off of the table.

With the stock having corrected to $36, it is worth chipping away at this growth company.

Savvis is building four new state-of-the-art centers which will expand capacity by 160,000 sq. ft. around the country. The company also has utilized options to take back below-market-rate contracts which it is in the process of re-marketing and repricing. Further, the data-center company is upgrading its network with new Cisco equipment, getting rid of older Nortel gear, and will link its metropolitan data centers with fiber to improve service for customers.

Savvis also has completely overhauled its balance sheet with lower cost-of-capital converts.

Earnings from these new investments and balance sheet changes should begin to be seen when the company reports in October. It is worth considering bottom fishing at this price level. If the product transition is slow, the stock has limited downside; if it is ahead of schedule, you can potentially make some good money.

MOST NOTEWORTHY: Polo Ralph Lauren (RL), Alcan (AL), Alcoa (AA) and Conn's, Inc (CONN) were today's noteworthy initiations:

• Polo Ralph Lauren (NYSE: RL) was initiated with a Market Perform rating at Piper Jaffray. The firm feels the risk/reward is balanced at current levels given the near-term risks from increased investment and exposure to inconsistent U.S. wholesale markets.

• Goldman Sachs resumed coverage of Alcan (NYSE: AL) and Alcoa (NYSE: AA) with Neutral ratings and a $101 target and $48 target, respectively.

• Morgan Joseph is positive on Conn's Inc's (NASDAQ: CONN) strong track record of growth, new store growth and easy comps, and initiated shares with a Buy rating and $34 target.

OTHER INITIATIONS:

• Merriman initiated shares of Blue Coat Systems (NASDAQ: BCSI) with a Buy rating.

• Stifel initiated shares of Pharmerica (NASDAQ: PMC) with a Hold rating on valuation.

• Equinix (NASDAQ: EQIX) and SAVVIS, Inc (NASDAQ: SVVS) were initiated at CIBC World Markets with Sector Performer ratings.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Savvis Inc (NASDAQ: SVVS), the data center company, will be going through serious changes the next few quarters as it continues to get rid of lower profit margin customers and adds brand new capacity. This transition will make apples-to-apples comparison very difficult with past results.

I'd consider taking some money off of the table until the company has fully made the transition. Investors could be able to measure the success of these changes as early as the fourth quarter of this year.

Savvis is building four new state-of-the-art centers which will expand capacity by 160,000 sq ft around the country. The company also has utilized options to take back below-market-rate contracts which it is in the process of re-marketing and repricing. Further, the company has been able to completely overhaul its balance sheet with lower cost-of-capital converts.

The data-center company is upgrading its network with new Cisco equipment, getting rid of older Nortel gear, and will link its metropolitan data centers with fiber to improve service for customers.

All told, Savvis is making the right changes to grow its business and improve profitability which will benefit shareholders. However, with such a broad-based transition going on, hitting bumps in the road is likely and waiting for signs of success is the best course of action. The benefits of this transition should be seen in late 2007 or no later than the 1st quarter 2008.

MOST NOTEWORTHY: The Wet Seal (WTSLA), Brocade Communications Systems(BRCD), IAC/InteractiveCorp (IACI), CME Group (CME) and Rogers Communications (RCI) were today's noteworthy initiations:

• Merriman believes the turnaround at Arden B is well underway and both it and the Wet Seal chains have tremendous opportunities for long-term growth, initiating The Wet Seal (NASDAQ: WTSLA) with a Buy rating.

• Pacific Growth is positive on Brocade's (NASDAQ: BRCD) diversification into new products and services, starting shares with a Buy rating.

• Banc of America initiated shares of InterActiveCorp (NASDAQ: IACI) with a Neutral rating.

• William Blair believes the newly-formed CME Group (NYSE: CME) has an even more dominant competitive position within the growing futures exchange industry, reinstating shares with an Outperform rating.

• JP Morgan said Canada is an attractive wireless market and that Rogers Communications (NYSE: RCI) is well positioned, starting shares with an Overweight rating...

OTHER INITIATIONS:

• Deutsche Bank initiated Waters Corp (NYSE: WAT) with a Hold rating.

• Goldman started Infinera Corp (NASDAQ: INFN) with an Equal Weight.

• Kaufman reinstated Savvis (NASDAQ: SVVS) with a Hold.

• Pacific Growth initiated Network Appliance (NASDAQ: NTAP) with a Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Savvis Inc (NASDAQ: SVVS) announced transaction with Microsoft Corporation (NASDAQ: MSFT) yesterday is another clear sign that the datacenter business is here to stay.

Savvis announced that Microsoft would assume leases for 300,000 square feet of datacenter space in Santa Clara that Savvis controls, the heartland of Silicon Valley. In return, Savvis receives $200 million. Microsoft gets greater control of more datacenter space and Savvis gets rid of below-market-rate leases that were signed when the industry was in the dump.

We began blogging that investors should jump into Savvis in April 2006 when the stock was selling for $26. Today, the stock is at $50, just shy of 100% profit. The datacenter industry was a boom-bust posterchild sector for Internet 1.0. Many of these companies went into or flirted with bankruptcy.

However, while the two largest stand-alone datacenter companies, Savvis along with Equinix Inc (NASDAQ: EQIX), have done considerably well since we started blogging about their merits as investments over one year ago, these stocks are still underfollowed and underknown. The fundamentals of this industry continue to improve and the barriers to entry continue to expand.

Stay with both Savvis and Equinix, and if you do not own them, I'd suggest buying them and putting them away. These are difficult assets to build and maintain and companies such as Microsoft, Google Inc (NASDAQ: GOOG) and Level 3 Communications Inc (NASDAQ: LVLT) want to own more of them.

MOST NOTABLE: Cabela's Inc (CAB), Time Warner Inc (TWX), Open Text Corp (OTEX) and Tortoise Capital Resources Corp (TTO) were some of today's more notable initiations:

• Cabela's inc (NYSE: CAB) was initiated with an Outperform rating and $30 target. The firm is confident in Cabela's outlook given the company's substantial store expansion opportunities, encouraging operating environment and valuation.

• Time Warner (NYSE: TWX) was started with a Buy rating and $25 target at UBS.

• Benchmark initiated Open Text Corp (NASDAQ: OTEX) with a Sell rating.

• Tortoise Capital Resources (NYSE: TTO )was initiated by both Ferris Baker and Stifel with a Buy rating.

OTHER INITIATIONS:

• CIBC initiated Volterra Semiconductor Corp (NASDAQ: VLTR) with a Sector Performer rating.

• Goldman initiated Savvis, Inc (NASDAQ: SVVS) with a Buy rating and $50 target.

• Cowen started Cogent Communications Group, Inc (NASDAQ: CCOI) with an Outperform rating.

• Avondale initiated Callaway Golf Co (NYSE: ELY) with a Market Outperform rating and $20 target.

• ThinkEquity started Adventrx Pharmaceuticals, Inc (NYSE: ANX) with a Buy rating and $5 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Genzyme Corp (NASDAQ: GENZ) and Sprint-Nextel Corp (S) topped today's list of initiations:

• Stifel initiated Genzyme Corp (NASDAQ: GENZ) with a Buy rating and $75 target, as the firm is positive on Genzyme's robust pipeline and growth.

• BMO Capital started Sprint Nextel Corp (NYSE: S) with a Market Perform rating.

OTHER INITIATIONS:

• Lehman Bros initiated Savvis Inc (NASDAQ: SVVS) with an Overweight rating and $52 target.

• Merriman initiated Harris Stratex Networks (NASDAQ: HSTX) with a Buy rating after the company posted strong December numbers; the key industry drivers are expected to continue to be robust while margin improvement is expected to continue. Share appreciation of Harris Stratex Networks is anticipated, as fundamental improvement is driven by industry growth and cost structure. Needham also started Harris Stratex Networks with a Buy rating and $27 target.

• Morgan Stanley resumed coverage of Cablevision Systems Corp (NYSE: CVC) with an Underweight rating and $29 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Savvis Inc's (NASDAQ: SVVS) business continues to improve, supporting the view that the data center business is a real business. As we have blogged about Savvis and Equinix Inc (NASDAQ: EQIX) in the past, these are two pure-play data center companies that were able to restructure their balance sheets in the post-tech & telecom bubble of the late 1990s. Here are some of the numbers for Savvis:

• Savvis revenue jumped 15%, with adjusted EBITDA jumping 55% to $123 million
• Revenue continued to shift to higher-end product lines, moving up the value chain to managed VPN and hosting services
• EBITDA for the fourth quarter jumped 67%
• Savvis was able to sell a subsidiary for $125 million which can be used to expand its core hosting businesses

The power of Savvis' model is that it can move its customers up the value chain which allows the company to grow revenue and EBITDA for a number of years.

For example, managed hosting generates $4 versus every $1 dollar earned for a commodity hosting business. In addition, for new services that Savvis will be able to sell to customers in 2008 on its upgraded infrastructure, that number goes up to $8 for every dollar of commodity services.

Savvis said by increasing co-location space and moving up the value chain, it can easily drive hosting revenue above $ 1 billion. High-end hosting and managed services is a real growth business. Stay focused on both Savvis and Equinix.

Savvis Corp (NASDAQ: SVVS), a left-for-dead tech-telecom bubble stock, continues to come back to life. While most investors are on vacation, Savvis, a large independent data center company, released some interesting news this morning.

• Savvis will add 180,000 square feet of raised floor space through new construction. This will increase its total data center footprint more than 10% to over 1.5 million square feet.
• Savvis will also sell its content delivery network services business to Level 3 Communications (NASDAQ: LVLT) for $135 million in cash. Management said it will focus on its core hosting and managed network services businesses.
  

Savvis and Equinix (NASDAQ: EQIX), another independent publicly traded data center company, continue to benefit from the strong demand for data center space. Customers require high standards for security and reliability, power availability, cooling, network connectivity, and environmental controls. Savvis has pre-booked most of the new space.

The expansion is expected to cost $200 million. With $135 million coming from the asset sale to Level 3 and 2007 EBITDA expected to come at $150 million, Savvis can fund this expansion without using outside financing---a very good sign of the financial health of the company and for increasing shareholder value.

Since TheFly blogged in April to begin looking at this sector again, Savvis and Equinix are up 38% and 31%, respectively.