Global Crossing forecasts strong year

(Telephony) Global Crossing forecast a robust fiscal 2001 today, estimating cash revenues to grow about 38% in 2001 and earnings before interest, taxes, depreciation and amortization (EBITDA) to show a 57% increase over 2000.

The Hamilton, Bermuda-based carrier said it expects 2001 cash revenues of $7.1 billion to $7.2 billion, up from $5.2 billion in 2000. Adjusted EBITDA is expected to be in the neighborhood of $2 billion to $2.1 billion, compared with estimates of $1.34 billion in 2000. Global Crossing has not yet reported earnings for the fourth quarter of 2000.

Global Crossing did not provide an earnings-per-share estimate. Analysts polled by First Call/Thomson Financial project a full-year loss of $2.94 a share in 2001, compared with an expected loss of $2.66 a share in 2000.

“In 2001, we expect to see continuing triple-digit growth in sales from our key data-service products and continued strong growth in sales from our wholesale non-IRU business, as we take advantage of our network capacity and our new voice-over-IP technology to provide service to other carriers,” said Tom Casey, CEO of Global Crossing, in a statement. Several segments of Global Crossing’s fiber optic network will come online in 2001: the Pan European Network will be completed, East Asia Crossing will begin service to Hong Kong in the first quarter, and the western ring of the South America Crossing will be put into service in the second quarter.

Sales of capacity in the form of Indefeasible Rights of Use (IRUs) will be a strong cash generator in 2001 but Global Crossing is only relying on 25% revenue growth in this segment to meet its projections, Casey said.

Instead, the carrier is counting on 100% annualized growth in data services sold to carriers, and in commercial services such as Frame Relay, ATM, IP, and private line.

Growth in data services as well as managed outsourcing of voice and data networks through the Global Crossing Solutions division will “more than offset” the projected decline in voice service revenues, Casey said. Wholesale voice is projected to grow about 50% in 2001, and Global Crossing’s consumer long distance business-which generates 3% of cash revenues-will continue to decline as the company pulls out of marketing retail consumer voice service or standalone commercial voice service.

The carrier’s capital spending plan, which calls for expenditures of $10 billion total for 2000-2001, remain unchanged. Capital spending for continuing operations is forecast to be $4.5 billion to $4.7 billion in 2001.

Long term, Global Crossing aims to post 30% yearly growth in cash revenue and 35%-40% yearly growth in adjusted EBITDA, Casey said.