Global Crossing Reports Q4/09, Holds Steady

February 16th, 2010 by · 6 Comments

International fiber and data operator glbc reported earnings this afternoon after the bell, posting solid numbers to end the year.  While slightly below my own optimistic guesses, revenue of $651M and OIBDA of $83M easily delivered on guidance, and the company generated positive free cash flow for both the quarter and the full year 2009.  Here is a quick tabular summary:

$ in millions Q3/09 Q4/09 2010 Guidance
GCUK 117 123
GC Impsat 125 128
ROW 311 306
Total Invest & Grow 553 557 2300-2375 (7-10%)
Wholesale Voice 89 93
Total Revenue 643 651
Cost of Revenue 443 461
SG&A 109 107
OIBDA 91 83 390-440
Free Cash Flow +52 +72 10-60
Capital Expenditures 33 49

Projections for 2010 were quite encouraging, with 7-10% growth in the company's "invest & grow" revenues leading the way and midpoint OIBDA finally breaking the $400M mark.  Alongside the rising OIBDA number, free cash flow guidance implies that they do intend to invest most of their organically produced cash flow back into the business in 2010 in the interests of further growth.

I had the opportunity to speak briefly with company management this evening, from which I gleaned:

  • On Q4/09 ROW revenues - this segment remains on track, in Q4 there was a hit to usage based revenues due to fewer business days.
  • Cost of access at GC Impsat included a true-up of some $9M, and was otherwise in line.
  • Projections of 7-10% growth are spread out geographically - GCUK, Impsat, and ROW should all see some of it.
  • They feel pricing trends remain roughly the same as they have throughout 2009, with the greatest pressure as always in IP transit.
  • Cash flow plans for 2010 include reduced IRU sales, but overall demand remains steady - just anticipating some shift amongst products and maintaining a conservative bias.

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Categories: Financials · Internet Backbones

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6 Comments So Far


  • Jose Antonio says:

    I am surprised with the cash level of GC 477 mill when they are paying 12% plus 3% =15%interest rate ,it looks crazy to me!!!!
    why do you think they hold such cash level?
    thanks

  • Rob Powell says:

    Flexibility and M&A possibilities. Not having cash on hand if the economy doesn’t turn around would be worse.

    On another note, in December the company’s GCUK notes became callable. I wonder if they plan to refinance those soon too.

    • Jose Antonio says:

      well a costly flexibility
      about 15 mill per Q
      2Qs already>>>> 30 millions
      invested in cx would have a better return
      I believe

  • carlk says:

    Because Rob has identified GLBC as a fine LVLT mix and match, while I have noticed a pattern of Legere following every Crowe move for many quarters now, I’m going out on the limb with a prediction that these two will be MARRIED very soon!

    “Bring it on!” 🙂

    IMO

  • carlk says:

    Oppenheimer agrees!

    Global Crossing volatility flat at 52 02/19 05:44 AM

    Global Crossing (GLBC:…) closed at $13.68. Oppheimer say’s Level Three (LVLT) should acquire either GLBC or XO Comm (XOXO). GLBC overall option implied volatility of 52 is near its 26-week average of 50 according to Track Data, suggesting non-directional price movement.

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