IDT Shares Plunge On Big Q2 Loss; Investing In Shale Oil
March 12, 2008, 11:15 am
Posted by Eric Savitz
Barrons
IDT (IDTC) is a very strange company, and they are confusing the heck out of their investors. That’s a problem, as is the fact that they are losing lots of money.
Best-known as a telecom company, Newark, N.J.-based IDC yesterday reported revenue for its fiscal second quarter ended January of $476.7 million, below Street estimates of $481 million. More troubling: the company lost $62.5 million in the quarter, or 83 cents a share; the Street had expected a loss of 33 cents.
IDC’s telecom operations are struggling: in its release, the company breaks down its business by division, and shows both sequential and year-over-year declines in wholesale telecom, pre-paid calling cards, and consumer phone services. The company also announced a $16 million writedown for IDT Carmel, the company’s debt collection business. And it clarified its recently announced plans to invest $50 million over the next 10 years in a new division called American Oil Shale to invest in, well, drilling for oil. The company meanwhile also owns a hodgepodge of other businesses as well, including Zedge.net, which distributes free user-generated mobile device content, and I.W.D. Publishing, which publishes graphic novels.
In a conference call late yesterday, CEO James Courter said the company is “disappointed to be reporting a loss.” He notes that the telecom market right now is “extremely challenging,” and he says the debt collection unit faces “extraordinary challenges” in the current economic environment.
“IDT is a company in transition,” he said. “For those of you who are long-time investors, it has been a frustrating time, and I know that. I can’t tell you that we turned the corner, or that the next quarter we will have turned the tide. However, one thing is certain. A year from now, we will look much different that we look today, and that look, in my mind, will be a very good one.”
IDT, the calling card/shale oil/Internet content/graphic novel company, this morning is down $1.47, or 25.8%, at $4.23. |
