In late September, during the height of the fear of financial armageddon, the international telecom operator Global Crossing gave presentations at several investor conferences. To disbelieving ears, they said that their growth trends were intact, and while they had been monitoring the situation watching for weakness they saw no disaster around the corner for their business. The market decided they must be blind and drove their stock down to an intraday low of $5.67 a little over a week ago – an all time low for the post-BK iteration of the company.
Well, today Global Crossing reported earnings, and lo and behold they were not the blind ones. Revenues of $667M were up 2.1% despite a $5M currency headwind, with growth from all three segments: GCUK, GC Impsat, and Rest-of-World. Adjusted EBITDA of $88M was up solidly from $77M last quarter, and earnings improved from $-89M to $-71M. All of these numbers were better than expected, and the company seems certain to meet its guidance for the year easily. One wonders how they might have done if the economy wasn’t in a tailspin. The company’s conference call may give us more insight into how they see the fourth quarter shaping up, but they’d be crazy not to be cautious of course.
Regardless, like TWTC who also reported today, Global Crossing appears to be in the odd position of being conspicuously stronger than it has ever been, and yet valued now like a lemonade stand in today’s market. Also like TWTC, they have enough cash to entertain M&A dreams and no debt worries for a long while. I have speculated before that if they are an acquirer then their natural target right now would be Abovenet, and I stand by that assessment. As an acquiree – well, that would require financing from wall street, something that seems unlikely in the near term.
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Categories: Financials · Internet Backbones
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Rumors are that they may relo their Southfield, MI Ops to the new HQ location in Rochester, NY.
On the inside.. Nothing really changing. No layoffs over the past year(That I recall), Raises were modest but fair, Bonuses earlier this year were paid in Stock(not worth much now). Moral is fair considering the economics currently playing, especially in MI.
they have built a brand new facility in Rochester NY and have nice places in Pheonix and Floram Park NJ. The Southfield offices i believe are leased and would make sense for them to reduce their real estate costs. Chesney have you heard of any timeframe they are going make such a move out of MI? what will happen to the employees there? Not exactly good news for Michigananders.
very interesting to hear GLBC say they have been in talks with everyone over the past 12 months. and they expect consolidation over the next 18 months.
It is RUMOR.. Nothing more at this point. It is widely known that they have a new facility in Rochester, NY as well as Pheonix and Floram.
Yes, Southfiled IS leased but also is home to A LOT of Operations as well as a NOC.
They are also looking to replace the typical cubicles with half height cubes.. so the relo rumor stands as a rumor. Why would they redo the cubicles at a pretty large cost only to then relo to Rochester? Wouldn’t make sense, but I am just sharing what I have heard.