‘Substantial Doubt’ About Covad’s Future

Internet service provider Covad Communications Group Inc. told federal regulators that its ability to continue as a going concern is uncertain.

Covad, whose shares have fallen 95% in the last year, also reported a loss of $907.5 million, or $5.41 a share, for its fiscal fourth quarter, including $589.4 million in charges for a reduction in the value of assets. The company lost $70.5 million, or 53 cents, a year ago. Sales rose 79% to $55.2 million.

The company restated sales for the first nine months of last year to $128.3 million from $156.3 million.

Santa Clara, Calif.-based Covad’s shares rose 21 cents to close at $1.26 on Nasdaq but fell to $1.10 in after-hours trading.

The company delayed filing its 2000 annual report three times because of an accounting investigation.

Covad has been reviewing how it recorded sales to wholesale customers, some of whom couldn’t pay bills after filing for bankruptcy.

Covad told the Securities and Exchange Commission that an independent auditor’s report this week raised “substantial doubt” about the company’s ability to remain in business.