IDT Revises Earnings Estimates, Announces Management
Additions
January 14, 1999 08:53 PM
HACKENSACK, N.J.--(BUSINESS WIRE)--Jan. 14, 1999--
Gross margins to fall short of consensus analysts' estimates,
revenues remain strong
IDT Corporation IDTC today announced that earnings will fall
below consensus analysts' expectations for the current quarter
and through the end of December 1999, primarily due to
delayed network deployment. For the current quarter, IDT
expects that earnings will fall short of such expectations by
approximately $.10 per share. The Company expects that its
revenues will stay in line with, or even exceed expectations.
IDT believes that its gross margins will be temporarily affected
primarily due to slower than anticipated interconnections with
PTTs, competitive carriers and alternative routes, and
increased losses from its Internet business and its Net2Phone
business. In addition, IDT attributes the decline in gross
margins to delays by telecom equipment suppliers to provide
certain equipment that is necessary to deploy its offshore sites,
and the costs of maintaining a redundant network as it migrates
its domestic traffic from the current leased network to network
recently acquired from Frontier Communications and other
carriers. The Company anticipates the migration process to
continue for two to three more quarters. In the interim, the
Company sees continued strength in both its domestic and
international traffic in anticipation of its network deployment.
The Company also announced several management additions
and changes. Yoav Krill, the former president of Bezeq
International, will assume the responsibility of Senior Vice
President of Global Networks. While at Bezeq, Mr. Krill was
responsible for its international strategy, including managing
all sales and marketing, network and operational efforts. In
addition, IDT has entered into an agreement with Global
Telesolutions, pursuant to which IDT and Global Telesolutions
will jointly develop portions of IDT's international network.
Anand Kumar, the founder and President of Global
Telesolutions, is the co-founder and former Executive Vice
President of Facilicom International. Mr. Kumar was
responsible for building Facilicom from a small Scandinavian
carrier to a global facilities-based carrier, and has also held
positions with AT&T, Bell Canada and Bell Labs. Each of Mr.
Krill and Mr. Kumar have over 30 years of experience in the
telecommunications industry.
Furthermore, Howie Balter, IDT's Vice Chairman and COO
was named the CEO of Net2Phone, and will lead the efforts to
finance and build the business as he has successfully done at
IDT. In his stead, Hal Brecher, IDT's Vice President of
Operations since November 1996, has been named the COO of
IDT. In addition, Ilan Slasky, IDT's Executive VP of Finance,
will become the CFO of Net2Phone. In order to concentrate
their efforts on the business of Net2Phone, which IDT intends
to continue to develop aggressively, it is anticipated that both
will resign their positions at IDT.
IDT is a leading emerging multinational carrier that combines
its position as an international telecommunications operator, its
experience as an Internet service provider and its leading
position in Internet telephony to provide a broad range of
telecommunications services to its wholesale and retail
customers worldwide. The company provides its customers
with integrated and competitively priced international and
domestic long distance, pre-paid calling cards, Internet access
and, through its Net2Phone product offerings, Internet
telephony services including Net2Phone Direct, Net2Fax, and
Click2Talk. For more information about IDT's services, please
visit www.idt.net.
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