Newspaper article THE JOURNAL RECORD

MCI WorldCom Earnings Almost Triple

Newspaper article THE JOURNAL RECORD

MCI WorldCom Earnings Almost Triple

Article excerpt

NEW YORK (AP) -- Third quarter operating profits nearly tripled at MCI WorldCom, the telecommunications juggernaut that's acquiring Sprint in the biggest corporate takeover ever.

The supplier of long-distance and Internet services said Thursday it earned $1.1 billion, or 55 cents per share, in the three months ended Sept. 30, excluding the impact of an investment in Embratel, a Brazilian telephone company.

That compares with a profit of $359 million, or 19 cents a share, in the same period last year from the combined operations of WorldCom and MCI Communications, which didn't complete their merger until the end of that quarter. The year-ago figures also exclude Embratel and merger-related costs.

Analysts had expected an operating profit of 54 cents a share in this year's third quarter, according to a survey by First Call/ Thomson Financial.

Third quarter revenues, excluding Embratel, totaled $8.5 billion, an improvement of 11 percent as compared with the combined $7.67 billion generated by the same operations in the third quarter of 1998. Including Embratel, revenue for the just-ended quarter totaled $9.2 billion.

The latest revenue tally reflects the loss of $29 million in service credits issued to customers in compensation for the widely publicized outages during August on one of the company's Internet "backbone" networks. The problems, caused by an upgrade to the system software running the network, were resolved after 10 days of disruptions, at which point MCI WorldCom granted 20 free days of service to about 3,000 business customers, including America Online.

The company also attributed its strong showing to savings on operating costs following the MCI merger, as well as the industry's shifting focus toward the volume of calling and Internet services being purchased rather than long distance vs. local access considerations.

While voice minutes increased 12 percent in the third quarter compared with the combined WorldCom and MCI operations in the same period last year, they continued to shrink as a percentage of the company's overall network volume. …

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