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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Art Baeckel who wrote (22355)	7/3/2001 12:09:13 AM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

WorldCom to Alter Accounting for Stake in Brazilian Telecom Firm Embratel Dow Jones Online News, 07/03/2001 00:05 WorldCom Group is expected to announce it is changing the way it accounts for its stake in Brazilian telecommunications company Embratel Participacoes SA, a move that could lower WorldCom's projected cash earnings for 2001, people familiar with the situation told The Wall Street Journal. The Clinton, Miss., telecom company is expected to reiterate its full-year revenue-growth projection of 12% to 15% but could lower its full-year, cash earnings-per-share forecast by as much as five cents, these people said. WorldCom (WCOM) had been predicting cash earnings, which exclude goodwill and other items, of between $1.25 and $1.35 a share for the year. WorldCom could announce the change and revised forecast as early as today, according to people familiar with the situation. A WorldCom spokeswoman declined to comment on the Embratel (EMT) stake. The revised estimate would put WorldCom's forecasts more in line with those of analysts, who have been lowering their cash earnings-per-share numbers based on the company's increased debt and exposure to Brazilian currency woes. Most analysts have a cash earnings-per-share estimate of about $1.20 for 2001. The lowered estimate would also reflect the higher interest expense WorldCom has as a result of its mounting debt load, these people said. The company completed an $11.9 billion bond offering earlier this year and took on about $3 billion in debt after it bought telecommunications company Intermedia Communications Inc. WorldCom had planned to pay some of its debt by selling Intermedia's local phone assets. But those assets have proved difficult to sell in the current economic environment. WorldCom, which consolidates Embratel's revenue and earnings into its own financial statements, plans to strip out the Brazilian company's revenue and earnings and classify them as miscellaneous income, said people familiar with the situation. The company, which has a 20% economic stake and a 52% voting interest in Embratel, also is considering whether to give up voting control, these people said. Copyright (c) 2001 Dow Jones & Company, Inc. All Rights Reserved.