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To: Johnny Canuck who wrote (40818)	3/11/2004 12:00:31 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69345

Global Crossing profits from bankruptcy Last modified: March 10, 2004, 4:00 PM PST By Reuters Telecommunications company Global Crossing on Wednesday posted a quarterly profit of nearly $25 billion, the largest on record for a publicly traded company, entirely due to gains from its emergence from bankruptcy. None of the gains came from its operations, and Global Crossing shares fell 30 percent on concerns that the company, which operates an undersea fiber-optic network, would not turn a profit any time soon or get the financing it needs. "I've been skeptical for a while and remain skeptical now," said Romeo Reyes, an analyst with Jefferies & Co., who said he doubted Global Crossing's business could become profitable. Gregory Miller, an analyst with Fulcrum Global Partners, questioned management's optimism about a turnaround against the background of a cutthroat telecommunications market. "It's 2000 all over again," he quipped, referring to the bursting of the telecommunications bubble. Global Crossing Chief Executive John Legere said on a conference call with analysts that the company was confident it could soon raise the $100 million in financing it is seeking, but he gave no time frame. He said Singapore Technologies Telemedia, which holds a 61.5 percent stake in the company, would provide the funds this year if Global Crossing could not raise the money on its own. But Reyes said the Singapore Tech financing commitment was only oral and was not written into any contract. Analysts worried that management claims that the company can eventually return to profitability are overblown. They noted the company was unable to report even a small operating profit for the fourth quarter. Global Crossing posted a fourth-quarter net profit of $24.88 billion due to gains from its reorganization under Chapter 11 of the U.S. Bankruptcy Code. The gains included $16 billion to account for its new debt and equity structure, and an $8 billion write-down of liabilities that preceded its bankruptcy filing. Quarterly revenue fell 6 percent to $719 million from $765 million a year earlier. Earnings before interest, tax, depreciation and amortization (EBITDA) were $13 million, compared with a loss of $62 million a year earlier. EBITDA is a measure of cash flow preferred by telecommunications companies. The company said it expects revenue of $2.55 billion to $2.7 billion in 2004, an EBITDA loss of $100 million to $130 million excluding a stock compensation expense, and capital expenditures of $145 million to $165 million. Global Crossing said it plans to aggressively hunt for new customers, offer higher-margin services over Internet networks, and review volatile businesses to see where there is room to tighten pricing and payment terms. Fulcrum's Miller said he was skeptical that those goals could be reached because of aggressive price-cutting by rivals such as Level 3 Communications as well as AT&T, the No. 1 U.S. long-distance carrier. Global Crossing said it had hired Citigroup Global Markets to advise it regarding the potential sale of its Global Marine installation and maintenance services business. Miller said he was concerned that a failure to sell Global Marine soon could lead to another bankruptcy. The division is "a dark could" that threatens the entire company, he said. Shares of Global Crossing, which emerged from bankruptcy on Dec. 9, were down $8.86 at $19.95 in midday trade on Nasdaq.