Cable & Wireless shares go into freefall

NEWS Cable & Wireless has issued a second consecutive profits warning, wiping £1bn off the company's value. C&W shares fell to their lowest point in nine years as a result, closing down 38p - or 12 per cent - at 275p. Chief executive Graham Wallace blamed the results on the turbulent global economy and warned that in the light of the terrorist attacks on the US, the situation is likely to get worse before it gets better. The news values the C&W at around £7.7bn, just £700m more than the company has accumulated in cash through a series of disposals. The company admitted that first half revenues for its core IP and data services C&W Global division will be five per cent lower than last year. This compares starkly with predictions in May that revenue would grow by five per cent for the year as a whole, with second half performance "significantly better" than the first. However, Wallace predicted that business customers chary of travel following the terror attacks might become more dependant on video-conferencing and electronic communications, boosting the company's voice and data traffic, The Times reports. Despite the drop in market cap, analysts claim the results were not as bas as feared.