Global Crossing posts loss, revenue falls
NEW YORK (Dow Jones/AP) ? Global Crossing Ltd. yesterday reported a third-quarter loss of $102 million as pricing competition pushed the long-distance carrier's telecom revenue down 1 percent from the second quarter.
The Florham Park, New Jersey, company which emerged from bankruptcy last December, reported revenue of $696 million in the third quarter of 2003.
Adjusted for an accounting change, revenue fell 9 percent from $676 million in the third quarter last year. These figures exclude the results of the Global Marine Systems business, which Global Crossing sold in August.
In afternoon trading, shares of Global Crossing dipped 41 cents, or 2.7 percent, to $14.65, on the Nasdaq Stock Market.
Global Crossing's third-quarter loss of $102 million includes results from Global Marine. That loss narrowed from a second-quarter loss of $112 million, due largely to reduced losses from Global Marine, reduced costs in accessing other carriers' networks and lower taxes, chief executive John Legere said on a conference call.
Majority shareholder Singapore Technologies Telemedia earlier this month added $25 million to a bridge-loan facility and deferred some payment obligations. Global Crossing said it now has sufficient funding to carry it through the end of the year. However, the company needs to come up with more financing for the future.
Global Crossing expects an additional $300 million or more in proceeds in mid-December from a secured debt financing. Shortly afterward, the company expects to collect $50 million to $100 million through a working-capital facility secured by its North American accounts receivable.
Combined, these financing arrangements would be sufficient to fund the company until its operations pay for themselves, Chief Financial Officer Dan O'Brien said during the conference call.
If unable to arrange the financing plans by mid-December, ST Telemedia may provide an additional $155 million in funding support, which Global Crossing expects would fund its operations through the early part of next year. Global Crossing announced these financing plans in early October.
In an effort to move toward profits, the company is in the midst of cutting 600 jobs and shedding or trimming certain businesses, including small-business and consumer local and long-distance, voice services for the financial trading industry and calling-card services.
Global Crossing expects these moves to save $41 million to $47 million a year, after charges totalling $16 million to $19 million, expected to be recorded mostly in the fourth quarter.