MCI Communications Corp. reported yesterday that net income grew 18 percent to $127 million (47 cents per share) in the last quarter of 1990 from $108 million (39 cents) in the same period of 1989.
Revenue at the Washington-based long-distance telephone firm rose 17 percent in the quarter, to $2 billion from $1.7 billion a year earlier. Revenue did not grow at all compared with the third quarter, however, indicating a loss of share in an expanding market.
Sales were flat, even though the fourth quarter was the first in which the full effects of the acquisition of an Atlanta-based competitor, Telecom USA, were felt. For all of 1990, MCI revenue grew 19 percent to $7.7 billion from $6.5 billion.
In the third quarter, MCI took a one-time $550 million charge against earnings in connection with a program to modernize its network. That helped drive net income for the year down by 46 percent, to $299 million ($1.06) from $558 million ($2.09).
Investors welcomed the earnings report, driving MCI shares prices up $2.12 1/2 to close at $24.37 1/2. Gene Gabbard, MCI's chief financial officer, said he believed Wall Street was relieved that the company had managed the subdued performance that analysts had predicted, rather than worsening. Citing the recession and increased competition, MCI earlier said it expected revenue growth to be flat.
Edward M. Greenberg, telecommunications analyst at Morgan Stanley & Co., said most of MCI's troubles were caused by the recession making more bills uncollectable and the probable defection of former Telecom USA customers.
That relatively little of it appears to be due to established MCI customers dropping out was viewed as a plus on Wall Street, Greenberg said. He called MCI's problems "clearly very serious but not as bad as we had thought."
A downturn in newspaper advertising led Gannett Co. yesterday to report an annual decline in profit for the first time in its 23 years as a public company.
Arlington-based Gannett, the nation's biggest newspaper publisher and the parent of USA Today, said its earnings for 1990 were $377 million ($2.36 per share), a 5 percent decline from $397.5 million ($2.47) in 1989. Operating profit was off 10 percent. Revenue for the year was $3.4 billion, a decline of 2 percent.
In the fourth quarter, Gannett earned $117.3 million (74 cents), down 8 percent from $127.4 million. Fourth-quarter revenue fell 8 percent to $904.6 million. The results for fiscal 1989 included an extra week of operations.
At USA Today, revenue increased 1 percent due to rate increases, but ad pages for the year were down 9 percent to 3,501.