C&W's Profit Falls but Meets Forecasts On Increase in Internet, Data Revenue
A WSJ.COM News Roundup
LONDON -- Cable & Wireless PLC said Wednesday that its fiscal-year operating profit fell 28% from a year earlier but met analysts' expectations, helped by a rise in revenue at its Internet and data-solutions operations.
The London-based telecommunications company also said it would seek shareholders' approval to raise the number of shares it can buy back to 15%, from the current 8.7%, in order to "maintain maximum flexibility."
C&W said earnings before interest, taxation, depreciation and amortization -- or Ebitda -- in the year ended March 31 dropped to 1.78 billion pounds ($2.53 billion or 2.88 billion euros) from 2.47 billion pounds.
Earnings per share fell to 96.4 pence from 153.6 pence, while sales dropped to 8.1 billion pounds from 9.2 billion pounds.
Analysts had expected Ebitda of between 1.4 billion and 1.8 billion pounds and sales between seven billion and eight billion pounds.
The company said Cable & Wireless Global, its Internet and data-solutions operations, posted 15% revenue growth during the year. Revenue from Internet services -- which includes Web-hosting, Internet Protocol Networks and e-commerce -- rose 40% and represented 22% of C&W Global's total revenue, compared with 16% in 2000.
C&W said demand for products from its data-services division continued to grow, with revenue for the year rising 8% and expanding across all of C&W Global's markets with the exception of Japan, where the company's emphasis is on Internet products.
Meanwhile, voice services -- including national and international long distance and wholesale voice calls -- made up less of the Global division's revenue, with the total percentage of revenue dropping to 57% from 62% a year earlier.
C&W Global's operating costs rose 236 million pounds in the year due to Internet acquisitions in Europe and increased development costs, the company said.
C&W expanded its Internet acquisitions into the U.S., agreeing Tuesday to acquire San Francisco-based Digital Island Inc. for about $300 million, plus $49 million of debt. C&W said it expects the acquisition to initially dilute earnings per share, but add to earnings per share within three years of the acquisition.
Revenue at Cable & Wireless Optus -- the subject of a takeover bid worth 17 billion Australian dollars (US$8.87 billion) from Singapore Telecommunications Ltd. -- posted revenue growth of 12% during the year, C&W said.
The unit, Australia's second-largest telecommunications company and 52.5%-owned by C&W, said earlier this month that annual net profit jumped 60% to 423.8 million Australian dollars.
C&W said Optus saw strong revenue growth across all three of its divisions, with data and Internet revenue accounting for 45%.
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