MCI WorldCom Inc. didn't invite some shareholders on a conference call to discuss the No. 2 U.S. long-distance phone company's first- quarter earnings and its outlook for 1999.
The company said it called analysts and institutional investors to connect them to the teleconference. Prior to the call, which started at 10 a.m. New York time, MCI WorldCom shares were down 5/8 at 87.
The stock fell further during the call after Chief Executive Bernard Ebbers declined to comment on whether it will acquire nationwide cellular provider Nextel Communications Inc., analysts on the call said. A purchase of the unprofitable company could hurt MCI WorldCom's future earnings, they said.
MCI WorldCom fell 4 5/8 to 83 1/16 in midafternoon trading.
MCI WorldCom has been negotiating with Nextel for several weeks, though the companies haven't been able to agree on price, according to people familiar with the discussions. Investors have been anxious to hear from MCI WorldCom on whether it will pursue the acquisition.
Shareholders who weren't on the call couldn't listen to Ebbers's comments until after 11:30 a.m., when a taped replay became available. The replay only included prepared remarks from Ebbers and Chief Financial Officer Scott Sullivan and not questions from analysts and others on the call. Ebbers ended his remarks by stating that he wouldn't comment on anything other than the company's main businesses.
U.S. Securities and Exchange Commission Chairman Arthur Levitt has condemned the practice of excluding the public from conference calls. Last month, the SEC said it may bar companies from disclosing market-moving information to securities analysts before they release it to the general public.
On the call, Ebbers discussed plans to reinvest proceeds from the $1.65 billion sale of the company's MCI Systemhouse unit, which manages corporate computer networks, to Electronic Data Systems Corp. He said MCI WorldCom plans to invest the funds in growth businesses without hurting earnings.
Sullivan said the company is ''absolutely comfortable'' with analysts' expectations for 1999 earnings. |
