What happened

Shares of GTT Communications (NYSE:GTT) plunged as much as 56.8% lower on Thursday, closing the trading day at a 46.3% loss. The networking and telecommunications company reported terrible second-quarter results and started looking for drastic solutions to its business problems.

So what

GTT's second-quarter sales came in at $434 million, below Wall Street's $448 million consensus estimates. On the bottom line, analysts had been looking for a $0.05 loss per share. The actual losses clocked in at $0.59 per share.

The company has hired an advisor to help it find buyers for some "non-strategic assets," aiming to reduce the company's financial debt and quarterly interest expenses.

Close-up shot of a technician's hands as they attempt to recombine two bundles of slashed network cables.

Image source: Getty Images.

Now what

Reducing the debt load looks like a good move, considering that GTT absorbed a $49 million interest charge in this quarter. That's a significant chunk of the incoming revenue and far above the company's $31 million in operating income.

When asked what kind of assets GTT might unload in order to stabilize that rickety balance sheet, CEO Richard Calder offered this high-level view: "Our highly strategic products are clearly wide-area networking, LAN leading with our most strategic products offer defined wide-area networking, Internet services, transport and infrastructure, ethernet, wavelength and unified communications," Calder said. "So things that fall outside of that portfolio are less strategic to us."

A successful asset sale could be just what the doctor ordered, but GTT is actually in deep trouble here. The company reported just $34 million of cash equivalents and $1.8 billion in property and equipment, balanced against a hair-raising $3.2 billion of long-term debt. GTT's $1.8 billion of goodwill won't do much to offset that back-breaking debt load.

This stock is falling for good reason and I wouldn't touch it with a 10-foot network cable until the debt-related panic is resolved.