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Technology Stocks : 360Networks - TSX - TSIX -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (102)	3/3/2001 12:10:24 PM
From: ms.smartest.person	Respond to of 449

360networks shares sink to year low on guidance March 02, 2001 2:29:00 PM ET (All figures U.S. unless otherwise indicated) By Ian Karleff TORONTO, March 2 (Reuters) - Shares of 360networks (TSX) fell 11 percent to a year low on Friday after the Canadian builder of a global fiber-optic network said a day earlier that it will not escape unscathed from the current malaise plaguing the telecommunications sector. 360networks slashed its guidance for revenue and earnings by 34 percent and 24 percent respectively, and reduced by $500 million its budget for capital expenditures in 2001 in order to compensate for its customers financial constraints. The company sells and leases space on its fiber-optic cables that currently link South and North America to Europe and names as its customers the likes of Alcatel Teleglobe and Deutsche Telekom. Greg Maffei, 360 chief executive, said it pays to be cautious when giving financial guidance in the current environment of worsening capital markets for telephone carriers, which he described as "telecom nuclear winter." The reduced guidance was released concurrently with fourth- quarter financial results with cash revenue of $158 million that beat analyst estimates by more than 10 percent. Net losses in the fourth quarter rose to $155 million or 20 cents a share, down from earnings of $11 million in the same quarter of 1999. And although 360 is not seeing reduced demand for bandwidth on its network, it said its customers are showing reluctance to prepay for bulk long-term capacity and are instead leasing capacity as they need it. 360 shares (TSX) sank 11 percent or $55/64 to $6 27/64 on Nasdaq in mid-afternoon trading on Friday and on the Toronto Stock Exchange the shares fell C$1.29 to C$10.70. Other companies with similar businesses were mixed with Level 3 Communications (LVLT) down 4 percent or $14/16 to $24 1/16, Global Crossing Ltd.(GX), up 1 cent to $16.20 and Williams Communications (WCG) up 37 cents at $12.42. Bonds issued by 360networks traded lower in London with its $600 million and 200 million euros of 13 percent bond due 2008 falling from 85 percent of face value to as low as 72 before recovering ground to 75 late in the trading session. Goldman Sachs lowered its earnings estimates for 360 and dropped the company from its recommend list on Friday but said: "We are confident in the long-term viability of the business." Other brokerage firms recommended that their clients steer clear of 360's shares until the company proves that it can stay afloat while continuing to build its network. 360networks is still in the process of building its network around the world, and is "highly dependent" on one-time sales of network capacity as opposed to higher margin leasing, said Mark Langner, analyst at Epoch Partners This is all about a shuffling of how demand is being purchased rather than a weakening of underlying demand, but pre-paid capacity purchases news.moneycentral.msn.com