WorldCom is awesome: revenue, cash flow and margins and great now and will grow really fast as traffic increases. Looks like The Street loves the company and approves of Ebbers' plans. Seems like a great stock to buy and not look at for a year or two.
This is old news (the day after earnings) from The Wall Street Urinal:
February 20, 1998
By John J. Keller
Staff Reporter of The Wall Street Journal
WorldCom Inc., continuing its rapid expansion, posted strong revenue and
profit in the fourth quarter despite having to absorb several major
acquisitions in the last year.
The Jackson, Miss., telecommunications carrier, which plans on completing
its $37 billion purchase of MCI Communications Corp. by midsummer, met
analysts' earnings forecasts with its profit of $142.9 million, in contrast to a
year-earlier loss of $2.14 billion related to an acquisition. More significant
was the power WorldCom drew from its network assets, now the
industry's broadest.
Revenue, traffic and profit margins skyrocketed from long-distance, local,
Internet and international businesses, including recent acquisitions. Even in
its core communication-services business, WorldCom's revenue grew 30%,
aided by a 32% traffic increase -- while giant AT&T Corp. remained
becalmed during the same period....
Revenue grew by 62% to $2 billion from $1.23 billion a year ago.
Pro-forma revenue in the fourth quarter of 1996, including MFS's numbers,
was $1.6 billion, meaning WorldCom revenue would have grown by 25%
had MFS been included in the year earlier numbers.
"This indicates that if you make good business combinations that are well
thought out and don't overestimate the numbers you expect to achieve, your
shareholders will reap the benefits," said Bernard J. Ebbers, WorldCom's
chief executive.
It remains to be seen how WorldCom will adjust to its just-completed
acquisitions of Brooks Fiber Properties Inc., another local carrier that has
networks that will expand the MFS footprint nationwide, and the network
operations of CompuServe Corp. and America Online Inc. But if
WorldCom's track record is any indication, the company should be able to
absorb the new operations easily....
Taken separately, WorldCom's revenue from core local and long-distance
services grew 17% to $1.06 billion in the fourth quarter, powered by the
company's retail and whole-sale transmission markets. International revenue
hit $238 million in the quarter, a 56% gain. Internet-access service revenue
more than doubled to $182 million.
Revenue at recently acquired Brooks Fiber, which will be included in
subsequent reports, more than doubled to $44.6 million in the fourth
quarter. Margins from earnings before interest, taxes, depreciation and
amortization, also called cash-flow margins, grew to 30.8% from 20% a
year ago, while operating-profit margins were 18.9%, up substantially from
6.5% a year ago and from 16.3% in the third quarter of 1997.
Analysts generally like Mr. Ebbers's brash, no-nonsense management style,
and his numbers. Indeed, Merrill Lynch & Co. forecasts tremendous
growth for WorldCom after the acquisition of MCI. By 1999, Merrill
forecasts the company's revenue will hit $37.4 billion with a compound
annual growth rate of 15% between 1999 and 2004.
"The bottom line will move even faster, with annual EPS [earnings per
share] growth of at least 25%," said Merrill analyst Mark Kasten.
"WorldCom is a speeding bullet." |
