Global Crossing Reports Progress on Core Revenue Growth

Global Crossing reported revenue for the second quarter of 2005 of $499 million, representing growth in the company's "invest and grow" category and expected declines in the "manage for margin" and "harvest and exit" business areas. Revenue declined approximately 5 percent compared with Q1 2005, when revenue was reported at $526 million, and 21% compared with Q2 2004, when revenue was reported at $628 million. For Q2, there was a loss of $27 million, compared with a loss of $28 million in the first quarter of 2005 and a loss of $38 million in the second quarter of 2004.


"We are very pleased with our progress, as we continue to concentrate on 'invest and grow' revenue and as the associated gross margins grow," said John Legere, Global Crossing's CEO. "Our core business is growing as we de-emphasize the lower margin services."


Revenue in the company's "invest and grow" category -- including its core businesses serving global enterprises, collaboration and carrier data customers through direct and indirect channels -- was $274 million in the second quarter of 2005, roughly flat compared to $273 million in the first quarter of 2005 and up from $263 million in the second quarter of 2004.


Overall gross margin as a percentage of revenue was 38%. Within the "invest and grow" category, gross margins were $148 million or 54 percent of "invest and grow" revenue in the second quarter of 2005.


Global Crossing reduced its cost of access charges by 3 percent sequentially to $311 million in the second quarter of 2005, from $320 million in the first quarter of 2005. Cost of access declined 31 percent year over year, from $450 million in the second quarter of 2004.
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