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Global Crossing beats expectation after 3Q shopping spree

    After a third quarter of rapid acquisitions, Global Crossing Ltd. (Nasdaq: GBLX) said loss for the third quarter was $34.1 million, or 4 cents a share, beating First Call's expected loss of 10 cents a share.

    Shares in the company which is building an international fiber optic network closed at 34 1/8 Tuesday.

    Pro forma results for the quarter (full statement), including Global Crossing, Global Marine Systems, and Frontier put revenue at $929.1 million, up 8 percent compared $863.4 million for 1998's third quarter. More than 70 percent of revenue was accounted for by the sale of services.

    Including Global Marine Systems and Frontier, Global Crossing has a contracted sales backlog exceeding $2 billion, most of which is expected to be recognized as revenue over approximately the next three years. Pro forma recurring adjusted EBITDA for the three months was $290 million, up more than 16 percent from the three months ended September 30, 1998.

    Global Crossing acquired Frontier after a long bidding war last September. Other highlights for the quarter include completion of the acquisition of Global Marine Systems on July 2; the formation of Asia Global Crossing, a joint venture with Microsoft and Softbank on September 8; and the completion of the merger with Frontier on September 28. On October 11, Global Crossing also announced an agreement to acquire Racal Telecom in the United Kingdom.

    Global Crossing said that with the conclusion of the merger with Frontier last month, it expects to begin combination with Frontier and Global Marine by bringing integrated networks and products to the U.S. and into Europe and Asia. The company now offers a full range of services including voice, Web hosting, private line, ATM (Asynchronous Transfer Mode), conferencing, and Internet services, in addition to its bandwidth products.

    The acquisition of the Racal network for about $1.65 billion be linked immediately to Global Crossing's network and to its new network operations center in London, which opened September 16. Charges for the quarter include a whopping $15 million as a result of the extinguishment of debt under pre-existing credit facilities.

    Bidding rival Qwest Communications (Nasdaq: QWST), which won US West while Global Crossing took Frontier, also reported results for its third quarter Wednesday, meeting estimates. Global Crossing realized income of $210 million, net of related expenses, in connection with the agreement that terminated its proposed merger with U S West.