IDT Telecom Cuts Back to Cover Loss

On Wednesday, June 7, IDT announced their 3rd quarter results and the picture looked bad. Their net loss, 15.9 million, was nearly double that of Q3 from 1 year ago (8.6 million). Revenue was announced at $485.4 million down from $547.2 million 1 year ago.

This seems to have caught many off guard as most analysts, who up until Wednesday had IDT stock as "hold," quickly changed their recommendations to "sell." While IDT officials kept up beat and political during the announcement, they drew no detailed plans of how they were going to turn the company around. Instead they kept blaming the poor performance on "the unfair business practices" of other calling card companies, a point of contention for them and the subject of an ongoing lawsuit.

As a result of the loss, IDT announced during their earnings call that they have just cut 300 jobs from the Telecom division. Add this to the 570 or so jobs cut in late summer last year and the company is pushing almost a 25% reduction in its work force from last year (Yahoo had IDT listed at 4,000 employees up until last week when they adjusted this number to 3,000).

Source:
http://biz.yahoo.com/ap/070606/earns_idt.html?.v=1