XO Communications Reports
Wider Net Loss for Quarter
By ANN DAVIS
Staff Reporter of THE WALL STREET JOURNAL
XO Communications Inc. posted a wider second-quarter loss, but more than doubled revenue despite bankruptcy filings by some key telecom customers of XO, which is one of the smaller entities challenging entrenched phone concerns.
XO Reports Wide Loss for First Quarter, Gets $250 Million in Additional Funding (April 27)
The Reston, Va., broadband services provider reported a $461.1 million loss, or $1.32 a share, a penny wider than expected, according to a survey of analysts by Thomson Financial/First Call. (Broadband describes cable or other devices that carry a wide range of frequencies or channels and large amounts of information.) In the year-earlier quarter, XO posted a net loss of $258.8 million, or 95 cents a share. Excluding a one-time charge, the year-earlier loss was $254.4 million, or 83 cents a share.
Aided by rising revenue per customer, sales more than doubled to $306.8 million from $140.6 million. Citing a new service contract with Nextel Communications Inc. and other deals in the pipeline, XO also raised third-quarter revenue projections to between $330 million and $340 million, about $5 million to $10 million more than the company had previously projected.
XO Chief Executive Dan Akerson sought to assure investors that the highly leveraged company, which saw its debt ratings lowered by Moody's Investors Service Inc. this month, could survive. He said in an interview that XO's strategy to build its own local networks and long-haul connections, rather than lease lines from other carriers, allows it to offer "soup to nuts" service to ever-larger businesses.
"If you look at the broadband sector, we probably have the most amount of debt but the most amount of cash," he said, pointing out that XO has $1.8 billion in cash and secured bank credit on hand to fund operations into the first half of 2003. XO's long-term debt is $5.3 billion.
In 4 p.m. trading Wednesday on the Nasdaq Stock Market, XO Shares were up seven cents at $1.76. Their 52-week high is $40.13.
The company said revenue was about $7 million lower in the first half of 2001 due to reduced traffic it formerly handled for onetime highfliers Teligent Inc., Northpoint Communications and Winstar Communications Corp. All of those companies filed for protection under Chapter 11 of the U.S. Bankruptcy Code this year, and Northpoint closed in March. On the bright side, XO said that it is picking up some of those companies' customers.
Write to Ann Davis at ann.davis@wsj.com |
