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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (11204)	5/15/2001 1:21:50 PM
From: TechMkt	Read Replies (1) \| Respond to of 15615

Satellites are NOT the wave of the future for the Internet. Teledesic is also having serious problems. Fez __________________ Tuesday May 15, 11:01 am Eastern Time Globalstar posts quarterly loss, defaults on debt (UPDATE: Recasts lead; Adds more details; edits throughout) NEW YORK, May 15 (Reuters) - Globalstar L.P., a provider of mobile telephone service via satellite, on Tuesday posted a first-quarter loss, and said it continues to review various restructuring proposals even as it defaulted on debt and took three satellites out of service due to operational problems. Globalstar said its net loss applicable to ordinary partnership interests was $145 million, or $2.25 a share. Year-ago comparisons were not immediately available. The New York-based firm is a partnership formed in 1994 by satellite firm Loral Space & Communications Ltd. (NYSE:LOR - news) and cellular telecommunications company Qualcomm Inc. (NasdaqNM:QCOM - news). Loral owns about 38 percent of Globalstar L.P. Globalstar Telecommunications Ltd. (NasdaqNM:GSTRF - news), the public Globalstar entity, owns more than 40 percent of the business. Qualcomm and several other companies own the remainder. Globalstar said in its release that Globalstar Telecommunications Ltd. lost 31 cents a share in the first quarter. Globalstar L.P. said it recorded 4 million minutes of use in the quarter, a 53 percent increase in traffic over the previous quarter. At the end of March, it had about 40,700 subscribers, an increase of over 30 percent from the previous quarter. It had about 44,000 subscribers by the end of April. ``While the company is continuing to work on restructuring its debt, Globalstar's marketing efforts remain uninterrupted. As a result, the company's rate of growth, both in minutes of use and subscriber numbers, rose substantially over the previous quarter,'' Globalstar said in a release. The company reported first-quarter gross service revenue of $1.9 million, up 66 percent from the fourth quarter of last year. Net revenue including royalty income from phone sales, but excluding discounts and promotions, rose 32 percent, to $1.5 million. Globalstar, which previously warned it may seek bankruptcy protection if it cannot restructure, said it had about $138 million in cash and cash equivalents as of March 31, giving it enough funds to continue operations through the end of 2001. The company said it defaulted on some debt due to its decision in January to suspend interest payments on its debt and dividend payments on its preferred stock. The suspension of these payments are expected to reduce the company's cash outflow by about $400 million in 2001. In recent months, Globalstar also took three problematic satellites out of operation, disrupting service to some subscribers for a few minutes per day. If these satellites cannot be restored, the company may replace them with on-orbit spares. Shares of Globalstar rose 2 cents at $0.68 on Nasdaq in morning trade. The stock has underperformed Nasdaq's telecommunications index by about 83 percent over the past year.