DJ Williams Commun -3: Company Fully Funded Into 2004 ¨
01 Aug 12:29
Williams Communications also continued to lower its projection for capital
expenditures for the 2001-2002 period. The company said capital expenditures
will come in at about $2 billion, down from a forecast of $3.2 billion
following the first quarter and an earlier projection of $3.9 billion.
Company officials stressed that the reduction doesn't signal any change in
their strategy.
"This is the capital required to continue to support our business plan,"
Chief Financial Officer Scott Schubert told analysts. "This does not suggest a
change in our business plan."
Instead, he and CEO Janzen said the reduction simply reflects factors such as
better-than-expected equipment pricing, a redeployment of warehouse equipment
and better "capacity realization" from existing infrastructure.
Still, the reduction in capital spending is expected to help keep the company
fully funded into 2004. The company previously said it was fully funded into
2003.
Janzen said the company has strong momentum and is seeing significant demand.
He said Williams Communications' customer base increased to 271 in the second
quarter, up 73% from the year-ago period. In addition, the company's network
gross margin came in at 12.4% for the second quarter, up sequentially from 7.5%
in the first quarter as it focuses on more profitable businesses and controls
expenses.
"We're adding revenue profitably, and we are improving our margins through
aggressive expense management," Janzen said.
He also stood by previous outlook calling for the company's full-year net
loss to come in at $1.1 billion, or $2.29 a share, excluding potential charges.
He reiterated that Williams Communications should be free cash-flow positive by
the end of 2003.
Williams Communications was spun off from Williams Cos. (WMB) in April. Prior
to the spinoff, Williams Cos. owned about 85% of Williams Communications.
-By Bob Sechler, Dow Jones Newswires; 512-236-9637
(END) DOW JONES NEWS 08-01-01
12:29 PM |
