Global Crossing, the New Jersey-based telecommunications group, continued its financial recovery in the fourth quarter, boosted by the strong growth of corporate and carrier IP (Internet protocol) traffic which grew by 196 per cent last year.
The company was forced into Chapter 11 bankruptcy protection in January 2002 and several executives were sued by investors alleging financial fraud. It emerged from Chapter 11 in December 2003.
Since then a new management team led by John Legere, chief executive, has worked to return the company to profitability focusing on global enterprises, carrier data and indirect channel customers.
“We delivered on two key financial goals – by having generated positive adjusted EBITDA (earnings before interest tax depreciation and amortisation) in the third and fourth quarters and positive cash in the fourth quarter - in addition to completing the acquisition of Fibernet, announcing the pending acquisition of Impsat, and driving significant growth in our core business segment, which resulted in improved profitability,” said Mr Legere.
Global Crossing this spring completed its acquisition of Impsat which provides private telecommunications, internet and information technology services to corporate and government clients in Latin America.
The company reported a fourth-quarter loss of $90m, compared with a loss of $80m a year ago, mainly due to an increase in provision for income taxes, but said it generated $18m in cash. Adjusted EBITDA, excluding non-cash stock compensation, was a loss of $25m for the year, a 61 per cent year-over-year improvement.
Consolidated revenue increased by 6 per cent to $488m from $462m in the year-ago period, while full year consolidated revenue grew to $1.87bn and adjusted gross margins expanded by 200 basis points to 40 per cent of revenue.
For 2007, the company said it expected revenue of between $2.17bn and $2.25bn and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), less non-cash stock compensation, of between $200m and $225m.