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Global Crossing beats estimates, reiterates guidance

Telecommunications provider Global Crossing topped analysts' estimates in its fourth quarter Wednesday when it posted a net loss of $617 million, or 70 cents a share, on sales of $1.54 billion.

First Call Corp. consensus pegged it for a loss of 89 cents a share in the quarter.

Ahead of the earnings report, Global Crossing (NYSE: GX) shares closed off $1.34 to $18.06 before moving up to $19.85 in after-hours trading.

The $1.54 billion in sales represents a 43 percent improvement from the year-ago quarter when it posted a net loss of $134.2 million, or 17 cents a share, on sales of $1.08 billion.

"We are extremely pleased with our fourth-quarter results, and again we have exceeded expectations while many other telecommunications providers have reported disappointing results," said Chief Executive Officer Tom Casey in a prepared release.

Carrier sales jumped 69 percent from the year-ago quarter to $3.11 billion, while telecommunications services and data products sales improved 40 percent and 72 percent, respectively.

Company executives reiterated their fiscal 2001 sales target of between $7.1 billion and $7.3 billion and said current analysts' estimates calling for a loss of 76 cents a share in the first quarter and $3.01 a share in the fiscal year were "reasonable."

"This is the leading undersea transport company in the world," said Pat Comack, an analyst at Guzman & Co. "That's what's bringing home the bacon now. What concerns the Street is the notion that it's only a transport company. At the end of the day, investors want to see some retail customers."

Ahead of the earnings report, Comack predicted Global Crossing would lose 82 cents a share on sales of $1.52 billion.

He rates the stock a "strong buy" and maintains a 12-month price target of $73 a share.

"The stock is trading at really, really cheap levels," he said. "But there are various factors that make investors uncomfortable about the stock. But there's no disputing that they have really cool technology and have managed to build out their network. Other companies are struggling to get the financing they need to build out their networks while Global Crossing is almost finished."

Last quarter, Global Crossing posted a loss of $572 million, or 65 cents a share, on sales of $1.37 billion.

The stock moved as high as $61.81 last February before slipping to a low of $11.25 in November.

Twelve of the 13 analysts following the stock rate it either a "buy" or "strong buy."