Genuity, Inc. reported a fiscal fourth quarter loss Thursday, based on a large one-time charge for assets devalued by overcapacity in the networking market.
The Woburn, Mass e-business network provider said that it recorded a special charge of $2.7 billion in the quarter, $2.6 billion of which was a non-cash charge to reflect a decrease in the market value of certain network-related assets. Minus the charges the company met its fiscal guidance for the quarter.
"Our industry has experience a dramatic change over the last year, coalescing in a recognition that the companys ability to recover the value of assets put in place in recent years to deliver IP services, was becoming increasingly difficult," said Genuitys chief financial officer Daniel OBrien, in a conference call with analysts on Thursday. "Our review, and that of outside experts, concluded that given these conditions, the assets directly associated with our dial and international access segments, as well as the underlying shared transport infrastructure, the fiber, optical electronics and POP infrastructure carrying data for customers are no longer supported by the project future cash flows from those segments."
Net loss for the quarter was $3.01 billion, or $13.52 a share, compared with a net loss of $284.1 million, or $1.48 a share in the same period one year ago.
Pro forma net loss per share, which excluded the special charges was 30 cents. Analysts surveyed by Thomson Financial/First Call were expecting a loss of 31 cents per share.
Revenue for the quarter was $316 million, up one percent from the previous quarter.
Genuity predicted a decrease in revenue for its fiscal first quarter 2002 to $280 to $290 million, resulting from the companys departure from the wholesale dial access business and the continuing slow economic climate.
Genuity announced it is dropping all but two wholesale dial access customers, Verizon and America Online. However, it will continue to deliver dial access service to enterprise customers as part of integrated service offerings.