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February 19, 2009

Global Crossing swings to loss in Q4

Global Crossing reported a net loss of $50m for Q4 08 compared to a net income of $2m in the year-ago quarter

By CBR Staff Writer

Global IP network operator Global Crossing has reported a net loss of $50m for the fourth quarter 2008, compared to net income of $2m in the year ago quarter, on revenue up 4% at $642m.

The loss was attributed to an unfavourable foreign exchange impact in 2008 and higher gains on pre-confirmation contingencies recorded in 2007.

Operating income grew 11% to $20m, while adjusted cash EBITDA fell 4% to $94m. Cash flow from operating activities was $79m.

The company said GCUK revenue fell 12% to $134m, GC Impsat revenue grew 17% to $122m and rest of the world revenue grew 8% to $394m.

For fiscal 2008, the company narrowed its net loss to $277m compared to a loss of $306m a year ago, on revenue up 15% at $2.59 billion. Adjusted cash EBITDA for the year grew 90% to $328m.

John Legere, chief executive at Global Crossing, said: Global Crossing delivered a strong 2008 and we delivered on our annual guidance despite significant headwinds from foreign exchange in the fourth quarter. On a constant currency basis, we expect 2009 revenue to grow in the mid- to-high single digits, although foreign exchange impacts are likely to cause reported revenue to appear flat to down. We are preparing for the uncertain economic environment ahead. Our company has launched targeted measures that will reduce our operating expenses and optimise our capital expenditures this year.

For fiscal 2009 the company expects revenue between $2.5 billion and $2.6 billion, OIBDA between $320m and $380m, and free cash flow between $50m and $100m.

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