Cable and Wireless earnings dip 5.7%

Cable & Wireless is considering splitting its business units after it posted a 5.7% drop in annual profit, an Associated Press report said.

Cable & Wireless reported a profit of €204 million (US$321 million) for the year ending March 31, compared with €216 milion (US$341 million) a year earlier, when the bottom line was boosted by the sale of its Bahrain unit.

Revenue fell 5.8% to €3.9 billion (US$6.17 billion).

'We will look at all options,' Finance director Tony Rice said, adding that they could include a breakup, the sale of some of the company's voice, internet and wireless networking service businesses or borrowing money to return capital to shareholders.

'We're talking about doing something in 2008 and 2009,' Rice said.

The company forecast in March that sales at its Europe, Asia and US division would increase 5% to 8% annually for the next five years, but its shares tumbled as analysts questioned whether the company would meet sales and cash-flow targets.

Collins Stewart analyst Mark James said he expected the shares to slip before any split of the company is announced.

Last year, the company cut its global work force by 9%, bringing the total number of employees to around 5,000, as part of a wider cost-cutting strategy.