Genuity To Lay Off 30 Percent, May Further Consolidate Operations

Genuity

The Internet telecommunications provider, which reported a narrower loss than in last year's first quarter, is also mulling further consolidation of its data centers and administrative offices.

For first quarter, Genuity lost $257.5 million, or $1.15 per share, on sales of $282 million, compared with a loss of $292 million, or $1.52 per share, on sales of $299 million for the year-ago quarter.

On a pro forma basis, assuming full conversion of Class B shares and excluding a penny-a-share charge from the latest quarter, a charge related to workforce reductions and an $11 million charge for renegotiating its contract with America Online, the company lost 25 cents a share, compared with a loss of 30 cents a year earlier.

First Call analyst estimates were for a loss of 27 cents per share.

The company said it is taking actions to reduce cash capital spending in 2002 from a previous target of $500 million to $600 million to its new target of $400 million to $500 million.

Also during the first quarter Genuity said it would exit its professional services businesses in France, Italy and Spain.

DSL proved to be a bright spot for the company, as it increased subscribers by 18 percent over last quarter and 139 percent over last year. The company also signed $86 million in new orders.

Genuity's revenue outlook for the year remained at $1 billion to $1.1 billion.