Summary from Reuters.
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Wednesday August 1, 6:59 pm Eastern Time
Global Crossing posts Q2 loss, warns of job cuts
(UPDATE: recasts, adds details)
PHILADELPHIA, Aug. 1 (Reuters) - Global Crossing Ltd. on Wednesday posted a wider second-quarter loss, slashed its revenue-growth outlook for the year, and said it would cut 2,000 jobs, or about 15 percent of its work force, and close some facilities in a move to save money.
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Hamilton, Bermuda-based Global Crossing said it suffered from slower sales to telecommunications carriers and corporations in the weak economy, and business failures among some customers.
Global Crossing's (NYSE:GX - news) second-quarter net loss increased to $629.6 million, or 78 cents a share, compared with a loss of $365.4 million, or 62 cents a share a year ago.
Analysts had expected the company to post a loss in the range of 71 cents to 84 cents a share, with a mean forecast of a loss of 84 cents a share, according to research firm Thomson Financial/First Call.
Global Crossing, which built a high-speed fiber optic communications network linking 27 countries and more than 200 major cities, said revenues rose to $1.07 billion from $898.2 million a year ago.
The company said it would close about 100 of its 600 offices and facilities worldwide, and cut jobs to reduce annualized operating expenses by about $160 million to $170 million. It will take a charge in the third-quarter of $250 million to $325 million to cover the cost of these cutbacks.
Global Crossing also said it may take a third-quarter charge to write down the value of certain strategic investments, such as Exodus Communications Inc. (NasdaqNM:EXDS - news). Exodus shares have fallen about 95 percent over the past six months.
For the full-year, Global Crossing expects its continuing operations to generate about $6.4 billion to $6.9 billion of cash revenue, about $4.4 billion to $4.5 billion in service revenues.
It previously expects cash earnings to be $7.1 billion to $7.3 billion. Recurring adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), or cash flow, will be about $1.6 billion to $2.0 billion, compared with previous forecasts of $2.0 billion to $2.1 billion.
It said the current consensus of analysts' earnings estimates for the third quarter and full-year are ``reasonable.'' Wall Street analysts expect Global Crossing to post a loss of 82 cents a share in the third quarter, and a loss of $3.17 a share for the full year, according to First Call.
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