Here's the copy of the note that I have, same thing as has been posted:
-- FB: AM CALL: GX: U.S. Defense Dept. Cancels Network Services Contract With
GX F --
08:54am EDT 17-Aug-01 Credit Suisse First Boston (Reingold, Daniel (212)
325-5
CREDIT SUISSE FIRST BOSTON CORPORATION
Equity Research
Americas
U.S./Telecommunications/U.S. Wireline
Daniel P. Reingold, CFA 1-212-325-5440 dan.reingold@csfb.com
Ido Cohen 1-212-325-5087 ido.cohen@csfb.com
HOLD
LARGE CAP
Global Crossing (GX)
U.S. Defense Department cancels Network Services Contract with Global Crossing
Summary
Price Target Previous Mkt.Value 52-Week
8/17/0111 (12mo.) Target Yield (MM) Price Range
$5.26 $5 $14 $5,426 $5.5-$38
Annual Prev. Abs. Rel. EV/ EBITDA/
EPS EPS P/E P/E EBITDA Share
12/01E (3.09) NM 9.6 $1.85
12/00E (2.69) NM 10.8 $1.66
March June Sept. Dec. FY End
2001E ($0.78) ($0.71) ($0.74) ($0.82) 12/31
ROIC
Total Debt (3/01) $8,510
Book Value/Share (3/01) $11.62
WACC
Debt/EV (3/01) 52%
Common Shares 888
EP Trend2
1On 8/8/01 DJIA closed at 10392.52 and S&P 500 at 1,181.66
Global Crossing is a multinational communications provider with assets
including a nationwide domestic US fiber network, a global undersea fiber
network, a terrestrial European fiber network, and key Asian joint ventures.
While the reason for the cancellation is unclear, the contract was being
challenged by the other bidders (AT&T, Qwest, Sprint, and WorldCom),
reportedly
on grounds that GX was unable to meet technical requirements. The contract
was
for at least $137M over 3 years with a total potential value of $450M over 7
years, and we expect the DoD will ask the original bidders to resubmit
proposals. While we make no changes to our forecasts, this issue will only
raise more concern about GX's revenue stream, especially following weak 2Q
results where revenues came in 2% below our forecast and were boosted by $345M
(21% of total) of capacity swaps.
We maintain our Hold rating.
N.B.: CREDIT SUISSE FIRST BOSTON CORPORATION may have, within the last three
years, served as a manager or co-manager of a public offering of securities
for
or makes a primary market in issues of any or all of the companies mentioned.
CREDIT SUISSE FIRST BOSTON CORPORATION CREDIT SUISSE FIRST BOSTON CORPORATION
Analyst: Reingold, D Telephone: (212) 325-5440 dan.reingold@csfb.com
CREDIT SUISSE FIRST BOSTON CORPORATION CREDIT SUISSE FIRST BOSTON CORPORATION
Copyright CREDIT SUISSE FIRST BOSTON, and its subsidiaries and affiliates,
2001. All rights reserved.
CSFB may, to the extent permitted by law, participate or invest in financing
transactions with the issuer(s) of the securities referred to in this report,
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position or effect transactions in the securities or options thereon. In
addition, it may make markets in the securities mentioned in the material
presented in this report. PLEASE REFER TO TICKER CSFBDISC FOR IMPORTANT LEGAL
DISCLOSURES.
= = GLOBAL CROSSING = = GX: HOLD
First Call Corporation, a Thomson Financial company.
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Symbols:
GB;NWFX GB;5413600 US;GX US;ALLF
17-Aug-2001 12:54:51 GMT
Source FC - First Call Research Notes
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