Global Crossing earnings follow promised pattern

Global Crossing today reported slightly lower losses on significantly less revenue as the company continued its shift toward global wholesale and enterprise markets on its IP network. According to company officials, the “Invest and Grow” strategy is working, producing a higher percentage of Adjusted Gross Margin, and a loss of $33 million, versus $35 million for the third quarter of 2004.

“We continue to meet our targets, demonstrating momentum as we become the premier network services provider, serving our carrier and enterprise customers with global converged IP services,” said John Legere, Global Crossing's chief executive officer, in a prepared statement. “We've extended our reach into 12 key markets in mainland China through an agreement with CPCNet, and we became the first global VoIP provider rated as 'SIP-compliant' by Avaya. Our focus on delivering converged IP services is unwavering.”

Global Crossing was able to cut key costs, including a 30 percent reduction in the cost of access, as the company increased its Voice over IP traffic to 64% of its overall voice traffic, or seven billion minutes of VoIP. Overall the volume of IP traffic for the carrier has increased from 90 Gigabits per second to 122 Gbps, including a 300% increase in higher value IP Virtual Private Network traffic.

Revenue was $481 million, a 22% decline from the third quarter of 2004, representing the move away from wholesale voice revenues. Consolidated was $95 million, compared to a loss of $96 million in the third quarter of 2004.

“Our goal in transforming Global Crossing's business was to achieve higher margins by focusing on the higher-quality IP revenue for which our network was built,” continued Mr. Legere. “Today's results are good news for Global Crossing, showing solid performance in our area of focus. Our business transformation is on track.”