Global Crossing to Restate Results

Fiber-optic network operator Global Crossing Ltd., which exited bankruptcy protection in December, said it would restate 2003 results after underestimating some liabilities. Its shares tumbled 27%.

The restatement, which is tied to money Global Crossing may owe other carriers to use their networks, is the latest misstep for the company, which already is under investigation by regulators in a separate accounting matter.

The company, run by Chief Executive John Legere since October 2001, has forecast a sales decline for 2004 and this month fired its auditor.

“This is a company that was in bankruptcy for two years. How is it that they could not perform an audit of the financials that was sufficient to find all the problems?” said Tejas Securities analyst Igor Volshteyn.

In a statement, Global Crossing -- majority-owned by Singapore Technologies Telemedia -- said it underestimated a balance sheet item known as the accrued cost-of-access liability by $50 million to $80 million at the end of 2003. It had reported the liability at $150 million.

Shares of Global Crossing, based in Hamilton, Bermuda, and run from Florham Park, N.J., fell $5 to $13.20 on Nasdaq. They have dropped 62% since the company emerged from bankruptcy protection Dec. 10.

Global Crossing had net income of $24.7 billion last year, boosted by accounting related to its bankruptcy reorganization. The reorganization erased $12 billion in liabilities.

Reported results for 2002 and 2003 and the company’s 2004 forecasts should be disregarded pending the outcome of a continuing accounting review for last year and 2002, Global Crossing said. The company postponed its annual shareholders meeting, set for June, and the release of first-quarter results.

Global Crossing has notified the Securities and Exchange Commission and Nasdaq of the expected restatement. The SEC is probing Global Crossing on allegations it inflated past revenue through network-capacity swaps. The SEC has forbidden companies from booking revenue from swap transactions.

The Justice Department also is investigating the company, which said in March that it didn’t know whether the probe had ended.