MCI WorldCom 3rd-Qtr Profit 20c-Shr: Earnings Instant Insight
Expected Market Reaction
Limited. MCI WorldCom Inc., the second-largest U.S. long- distance phone company,
earned a pro forma $359 million, or 20 cents a share, before special items in the third
quarter. That's compared with a pro forma loss of $287 million, or 17 cents a share, a year
ago.
The Jackson, Mississippi-based company was expected to earn 21 cents a share, the
average estimate of analysts polled by First Call Corp. Behind the Numbers
Investors are anxious to hear how well MCI WorldCom is integrating networks, operations
and employees since WorldCom completed its $47 billion purchase of MCI
Communications Corp. last month. The company said it took a $3.1 billion charge in the
quarter to write down in-process research and development at MCI.
MCI WorldCom's sales and traffic on its network are growing faster than rivals, boosted
primarily by early investments in the Internet. The company's also taking advantage of its
global reach, which extends to Europe and Asia, as Sprint Corp. and AT&T Corp. struggle
to build alliances with international carriers.
Last month, MCI WorldCom said it will offer discounts of as much as 35 percent for calls
between companies that use its local, long-distance and international services.
The company also plans to triple the size of its network in Europe, spending as much as
$1.2 billion to boost the number of cities connected to 45 from 10. What the Experts Say
''There is strong demand for data and Internet services from businesses and consumers,''
said Oscar Castro, senior portfolio manager at Montgomery Asset Management LP, which
owns about 222,000 MCI WorldCom shares. ''MCI WorldCom is by far the Internet leader.
You can assume they will do very well.'' Previous Market Reaction
WorldCom shares rose 1 1/16 to 55 3/8 on July 23, when the company reported
second-quarter earnings rose more than fivefold, beating expectations, on surging sales of
Internet and other data services. Net income was $227.5 million, or 21 cents a share.
Market Performance
MCI WorldCom shares have risen 79 percent so far this year. They rose 1 1/2 to 54 1/16
yesterday. |
