Not sure believing Ebbers...WorldCom CEO Ebbers Says
2001 Earnings Still on Track
By JOHNATHAN BURNS
Dow Jones Newswires
NEW YORK -- WorldCom Inc. Chief Executive Bernie Ebbers said Wednesday the company is sticking to its financial guidance, and that business in the first quarter is "doing extremely well."
"We are not revising guidance. We stick by our guidance," he said. "We don't intend to miss it."
WorldCom Slashes Up to 6,000 Jobs in Company's First-Ever Layoffs (March 1)
WorldCom, Intermedia Agree to Revise Terms of Deal in Bid to Settle Digex Suit (Feb. 16)
WorldCom's Net Income Drops 44% as Long-Distance Business Weakens (Feb. 9)
Investors applauded the outlook. In midday trading Wednesday, WorldCom shares were up $1.48, or 10%, to $16.67 on the Nasdaq Stock Market.
Recently, many on Wall Street have speculated the Clinton, Miss., company would be lowering its guidance. Also, many have said Mr. Ebbers has wanted to sell the company after its merger with Sprint Corp. was squashed by U.S. and European regulators last year.
Mr. Ebbers, speaking at the Merrill Lynch Global Communications Investor Conference here, didn't comment on whether he wanted to sell WorldCom. He did say he hadn't met with officials from SBC Communications Inc. to discuss a merger.
However, he said if WorldCom stock weren't so depressed, the company "would be in the acquisition business big time."
Mr. Ebbers spent much of his presentation detailing the split of WorldCom into a cash-generating consumer voice and dial-up Internet business under the MCI name and the digital services company focusing on business customers bearing the WorldCom brand. The distribution of the MCI business to shareholders is on track for early June.
Mr. Ebbers said all WorldCom has to do to meet its growth targets is get its fair share of the emerging demand for data services.
WorldCom will spend about $8 billion on capital projects this year, said Chief Financial Officer Scott Sullivan. The company said previously it intends to spend between $8 billion and $8.5 billion. "We feel absolutely comfortable with the lower end of that range," he said.
Mr. Ebbers added that the company has enough network capacity to handle normal growth and traffic through 2008.
Mr. Sullivan said WorldCom will show "probably a better than $300 million improvement" in cash flow in the first quarter as compared to the fourth quarter, partially due to lower capital spending.
The company also is seeing less pricing pressures for service than in the past.
As a sign of how tough it is in the equipment market, Mr. Sullivan said equipment companies are now offering price discounts on products at the beginning of the quarter instead of at the end, which is typical practice.
Write to Johnathan Burns at johnathan.burns@dowjones.com |
