MCI WorldCom Reports Loss, Citing Merger
Washington Post Staff Writers
Friday, October 30, 1998; Page F03
MCI WorldCom Inc., in its first quarterly earnings announcement since WorldCom bought MCI Communications Corp. for $40 billion, reported strong revenue growth and industry-leading increases in traffic on its voice and data networks.
The company, now based in Jackson, Miss., rather than the District, said it earned $268 million (21 cents a share) in the third quarter, compared with net income of $69 million (7 cents) one year earlier. After merger-related expenses of $3.3 billion and other charges, the net loss for the third quarter was $2.9 billion.
The results were calculated before special items on a pro forma basis, which assumes that the MCI acquisition and other WorldCom Inc. deals occurred as of the beginning of the year for both periods. Net income was in line with estimates from analysts polled by First Call Corp.
Revenue was $7.7 billion, a 16 percent increase from $6.6 billion for the third quarter of 1997. The company had a 33 percent increase in data services revenue and a 10 percent increase in voice communications revenue.
Two-thirds of the company's revenue growth came from Internet, international and data sales. Voice traffic growth on MCI WorldCom's network grew 15 percent during the quarter, compared with AT&T Corp.'s 3.1 percent and Sprint Corp.'s 12 percent.
For the nine-month period, pro forma net income was $644 million (58 cents), compared with $122 million (12 cents) a year earlier. Year-to-date revenue was $22.4 billion, up 15 percent from $19.5 billion.
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