WorldCom Consolidated Fourth-Quarter Net Falls 64% (Update10)
By Dana Cimilluca
02/07 16:43
quote.bloomberg.com
Clinton, Mississippi, Feb. 7 (Bloomberg) -- WorldCom Inc.'s fourth-quarter profit dropped 64 percent as sales fell at its MCI telephone unit, the second-biggest U.S. long-distance provider. Chief Executive Officer Bernard Ebbers said the carrier has access to enough cash to survive, lifting the shares 12 percent.
WorldCom's net income slipped to $258 million, while sales fell 12 percent to $8.4 billion, also hurt by waning demand from corporations for phone and data services. WorldCom said it may have to write down as much as $20 billion from acquisitions.
Ebbers told analysts on a conference call that bankruptcy isn't a concern for the company because it has $10 billion in available funds. WorldCom shares had lost half their value this year, buffeted partly by investor concern about a possible credit downgrade. Ebbers also said he has the assets to repay a $198.7 million company loan and won't need to sell shares to cover it.
``The company dispelled a lot of fears from the rumors that were out there, everything from debt issues to Bernie's personal situation,'' said Craig Nedbalski, a telecommunications analyst who helps manages $71 billion at Victory Capital Management, an owner of WorldCom shares. ``It was refreshing to see them hit those issues head on.''
WorldCom consists of the MCI Group consumer operation and the WorldCom Group corporate data business. Ebbers in June created MCI Group shares to track the slower growing consumer long-distance, paging and Internet-access operations. AT&T Corp. is the biggest U.S. long-distance operator.
Shares of WorldCom Group rose 83 cents to $7.52, after climbing as high as $8. The stock has fallen from a June 1999 high of $62, wiping out more than $100 billion in market value. MCI Group slipped $1.45, or 16 percent, to $7.61. |
