Fiber optic network company Williams Communications (NYSE: WCG) reported a hefty loss Monday, but said it expects to be cash flow positive on an operational basis by the end of 2001.
The Tulsa, Okla.-based company, which topped analysts' estimates in the third quarter, ended Friday's session up $0.13 to $18.05. Williams Communications is 85-percent owned by energy company Williams Cos. Inc. (NYSE: WMB).
For the fourth quarter, the company reported a net loss of $546.6 million, or $1.18 a share, compared with a loss of $74.0 million, or 16 cents a share, in the year-ago period. First Call consensus analysts' estimate was for a loss of 48 cents a share. Williams said its earnings from continuing operations before interest, taxes, depreciation and amortization and other adjustments (EBITDA) topped estimates.
The company registered a fourth quarter loss from continuing operations of $55.7 million, or a loss of 13 cents per share. The figure includes a $148 million tax benefit relating to a change in the company's estimated tax expense for the year and transactions that occurred in the fourth quarter.
Unaudited revenues from continuing operations were $287 million, compared with the $159.2 million seen in the fourth quarter of 1999.
Consolidated earnings from continuing operations before interest, taxes, depreciation and amortization and other adjustments (EBITDA) rose in the quarter $64.3 million, including $98.6 million of investment gains. EBITDA rose sequentially from the loss of $9.3 million, including $50.7 million of investment gains, seen in the third quarter.
Excluding the investment gains, operational EBITDA was a loss of $34.3 million compared to a corresponding loss in the third quarter of $60.0 million.
The company said it was confident it would meet or exceed 2001 analysts' estimates for total network revenues that range between $1.3 billion and $1.4 billion. Company officials also said that the company expects to be EBITDA-positive on an operational basis by the end of 2001.
During the quarter, the company completed its next-generation network, which connects 125 cities, a year earlier than scheduled, according to a release.
The company also said it would sell its solutions operations and concentrate on its broadband network businesses. Williams Communications is expected to sell its solutions businesses in the United States and Mexico by the end of the first quarter, with Canadian operations to be put on the block later in the year. The company expects take in between $350 million and $450 million in cash, excluding disposition costs.
For the year, Williams Communications reported a loss from continuing operations of $822.6 million, or 61 cents a share, on revenues of $839 million. Net loss for fiscal 2000 was $1.77 a share.
The loss from continuing operations shrunk from the 359.7 million, or 79 cent a share, loss for fiscal 1999, but net loss rose from the 87 cent a share figure reported a year ago. Fiscal 1999 revenues were $601.5 million.