GLOBAL CROSSING PAINTS BRIGHT PICTURE
Aug 5, 2008 10:13 AM, By Carol Wilson
Global Crossing executives were decisively upbeat in unveiling their second-quarter earnings, due in part to a company record number of orders in July and an overall performance that was better than expected.
Global Crossing reported a 19% increase in consolidated revenue to $653 million, a 13% sequential increase and a 90% year-over-year bump in adjusted cash EBITDA to $77 million. The company reported a loss for the quarter of $88 million, down from a loss of $100 million a year ago.
Order volume for the quarter was up both sequentially and year-over-year, as Global Crossing failed to see any impact of a slowing economy, Chief Executive Officer John Legere told industry analysts.
“In July, we matched our record level of orders, coming from pretty widespread global demand,” Legere said. “We think this is because of the trends we have been speaking about for a couple of years now, which not only continue but are accelerating. Specifically, there are fewer players – consolidation has a special effect on us. Also, the supply and demand situation has moved in favor of supply, which has had a positive pricing effect in the market. And probably the most important trend is that of the adoption and accelerated conversion around an IP platform. Those are the trends playing into our order volume. As for the macro economy, we are watching that closely, and we don’t see those signs yet, nor do we see any reason why these particular trends shouldn’t continue.”
Global Crossing is finding success almost under the radar of larger incumbent carriers, Legere said, in many cases growing its business organically by taking a growing percentage of traffic from businesses that used Global Crossing as an alternative or secondary supplier.
“We may be moving from a 5% share to a 9% share of their business, but they are not changing out their major carrier,” Legere said. “In very specialized global IP applications, a simple share shift is taking place. The positive with that is that [it doesn’t create] the same aggressive price competition or such a huge retaliation. We are a small player, and we can very quietly become a bigger player but not the dominant player. That’s a very lucrative business for us to be in.”
Global Crossing carried 1.25 terabytes of traffic on its network in July, Lagere said, and 7 billion VoIP minutes.
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