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To: Johnny Canuck who wrote (41201)	5/24/2004 8:05:32 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69735

UPDATE - McLeodUSA loss widens, moves to conserve cash Wednesday May 5, 1:04 pm ET (Recasts lead, adds details) NEW YORK, May 5 (Reuters) - Telephone company McLeodUSA Inc. (NasdaqSC:MCLD - News) on Wednesday posted a wider first-quarter loss and revealed plans to sell assets and conserve cash to help stem the effects of customer losses and declining revenues. ADVERTISEMENT The company said it would try to sell fiber assets and has lowered its capital spending plans to save money. Its shares fell as much as 10 percent in midday trading. McLeodUSA, based in Cedar Rapids, said its quarterly loss was $92.2 million, or 32 cents a share, compared with a loss of $85.3 million, or 31 cents a share, a year ago. Revenue fell to $193.6 million from $225.9 million. McLeodUSA -- one of the few remaining regional companies competing with local and long distance providers such as Qwest Communications International Inc. (NYSE:Q - News) and SBC Communications Inc. (NYSE:SBC - News) -- said it lost more customers than it signed up during the quarter. The company hopes to make $50 million this year from selling fiber telephone lines it put in the ground during the telecommunications spending boom of the late 1990s that caused an industry slump that is only now beginning to fade. McLeodUSA, which emerged from bankruptcy in 2002, abandoned a plan to sell these assets around that time as it was able to sell other non-core assets. The company also said its creditors approved changes to its lending agreement, including changes to minimum revenue related to agreements. It ended the quarter with $49 million in cash. It also reduced spending plans aimed at growing the company by $50 million to $55 million in 2004 from its earlier target of $65 million. McLeodUSA said it expects its expense controls to save $8 million a quarter by the fourth quarter this year. McleodUSA shares were down 5 cents at 97 cents in early afternoon trade on Nasdaq after falling as low as 90 cents.