On Tuesday, IDT
In its most recent earnings statement, IDT's full-year revenues, which exclude the IDT Entertainment segment, were essentially flat at $2.2 billion. Fourth-quarter revenues were up $8 million, or 1.5%. Operating losses expanded from $139.8 million in fiscal 2005 to $220.8 million in fiscal 2006. Fourth-quarter operating losses improved from $57 million to $44 million. As you would guess, returns on equity and capital were negative.
One of the only bright spots has been the IDT Entertainment segment, which actually made money. However, it was just sold to Liberty Media Interactive
Basically, it looks like business as usual. How does this company, which can't turn a profit from operations, remain an ongoing entity? I'm guessing that IDT, which began life as a telecom, is surviving as a venture capitalist. IDT's day job of selling prepaid phone cards to companies such as Wal-Mart
Management is pinning its hopes on selling brochure racks found in airport lounges, utility and natural gas services in New York, AM radio in Washington D.C., and an ethnic grocery-brands business based on IDT's recent purchase of Vitarroz. Frankly, I don't see these new ventures offering much hope for the future.
To buy this stock, you must have serious conviction that management can incubate these new business lines into profitable divestitures or IPOs before the company bleeds to death from continued operations. Me? I'm amazed IDT has lasted this long.