GTT Communications saw its shares drop by 46% after the market closed on Thursday due its dismal second-quarter results.
According to a story by Seeking Alpha, Thursday was GTT's worst day on the stock market since 2012. GTT's stock was up 6.4% to $6.48 per share in late morning trading on Friday. GTT's 52 week high is $47.20 per share.
Dating back two years, GTT has closed and integrated 10 acquisitions, including its $2.3 billion deal to buy Interoute last year. Those deals have nearly quadrupled the size of the company, but along the way GTT has built up $3.2 billion of long-term debt.
In the second quarter, GTT reported $1.8 billion in property and equipment and $34 million in cash equivalents.
GTT CEO Richard Calder said on Thursday's second quarter earnings call that the company has hired a strategic advisor to look for buyers for the company's "non strategic assets" as a means to reduce its financial debt and quarterly interest expenses. GTT had a $49 million interest charge in the second quarter, which exceeded its $31 million in operating income.
Calder said that GTT's strategic products were wide area networking (WAN), internet services, transport and infrastructure, Ethernet, wavelength and unified communications.
"So things that fall outside of that portfolio are less strategic to us," Calder said, according to a Nasdaq transcript of the earnings call.
While the sell-off of assets is in the early stages, Calder said he couldn't comment on the amount that GTT might raise, but GTT expects to take those proceeds from the sales to pay down its debt.
Calder said GTT was working on standardizing its initial design and deployment of SD-WAN, which represents approximately 25% of the company's current installed backlog. Last month GTT expanded its SD-WAN portfolio by adding a uCPE solution that allows its customers to run multiple virtual network functions (VNFs) on a single device.
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Calder also said that GTT needs a bigger sales force to drive a larger volume of sales and installs to outpace its churn. GTT ended the second quarter with 320 "quarter bearing reps" but wants to increase that number to 400 reps by the end of this year and 500 by the end of next year, according to Calder.
GTT's second quarter sales were $434 million, which was below Wall Street consensus estimated of $448 million. GTT lost $0.59 per share in the second quarter while analysts were projecting a loss of $0.05 per share.