WINNIPEG – MTS Allstream said late Wednesday that its enterprise division is still suffering the effects of the recession and that it will miss some of its third quarter financial markers.
The update, released after the markets closed, reflects “the impact the recession and the slow pace of economic recovery are having principally on the Company’s Enterprise division,” reads its release. “The Company’s revised outlook primarily reflects a sharper than expected decline in its legacy long distance business, as well as in the unified communications business.”
While its consumer division – based just about completely in Manitoba under the MTS (Manitoba Telecom Services) brand, its national enterprise group (the Allstream part) has its challenges. However, “converged IP, the largest and fastest-growing product line within the Company’s Enterprise Solutions division, also continues to deliver solid growth,” reads the release.
"The growth businesses like wireless, broadband and Converged IP that will define our long-term success continue to perform well despite the economy. Our legacy Enterprise long-distance business, however, is declining faster than anticipated," added Pierre Blouin, CEO.
"This is having a near-term impact on our financial results but has done nothing to undermine our positive long-term outlook. We are taking the appropriate steps to position the company to benefit when the economy recovers, including our targeted cost reductions which are expected to achieve $50 million to $60 million of annualized savings in 2009."
So, the company says that with its look at Q3 (the official results for the quarter ended September 30th will come out November 5) the year-end now shows revenue in the $1.85 billion to $1.9 billion range, EBITDA in the $625 million to $645 million ballpark, drops of about 3%, and free cash flow of $230 million to $250 million, an 8% decline.
