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Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: MichaelW who wrote (4759)	7/7/1999 6:17:00 PM
From: VFD	Respond to of 11568

Telecom services stocks rose as analysts made positive comments about the group. Frank Governali, the new telecom analyst at Goldman Sachs, started coverage of 17 telecom services companies Wednesday. Included on the analyst's Recommended List were SmartMoney pick MCI WorldCom, SBC Communications, Ameritech, AT&T, CenturyTel, ITC DeltaCom and Metromedia Fiber Network. Meanwhile, Leslie G. Stonestreet at Banc of America Securities reiterated her Buy rating on MCI WorldCom shares. While Internet and data services are driving growth, the analyst notes that she slightly reduced her growth rates for its basic phone service business (which is also called voice) because of wholesale price pressures. Stonestreet trimmed her quarterly voice revenue numbers to $5.126 billion from $5.191 billion and lowered her five year annual compound growth rate to 4.7% from 5.4%. Still, "wholesale pressure should not impact the company long term as WCom's focus on higher-growth businesses (Data and Internet) serves to mitigate the importance of Voice growth in the overall business mix," Stonestreet said in a research note. The analyst expects MCI WorldCom's second quarter Internet revenues to grow 60% from the year-ago quarter and to increase over the next two quarters by 67% and 70%, respectively. MCI WorldCom has indicated that it is comfortable with the consensus earnings per share estimates of 44 cents for the second quarter and $1.97 for the year. Stonestreet is confident that the company will meet or exceed these estimates. The Street's second quarter earnings forecast represents a 175% jump from a year ago and a 22% increase over last quarter. The analyst sees MCI WorldCom shares trading at 110 by year end. In other telecom news, US West is reportedly seeking to structure a combination with Qwest Communications as a merger of equals, rather than a takeover, according to Wednesday's Wall Street Journal. While US West has already agreed to a merger with Global Crossing, Qwest's $35 billion bid represents a 20% premium over Global Crossing's $29 billion offer. But Global Crossing's offer is still appealing, since Global has agreed to make US West CEO Solomon Trujillo co-chief executive of the combined entity. Qwest is also in talks to acquire Frontier out from under Global Crossing. While Global Crossing has offered Frontier about $11.1 billion, Qwest's bid is currently valued at $12 billion. RT