MCI beats Street estimates
The telecommunications giant beats Wall Street earnings expectations by posting an increase of nearly 11 percent.
The company reported revenue of $5.4 billion, an increase of $527 million from the year-ago quarter. Net income was $195 million or 26 cents per diluted share. The result beat Wall Street's expectation of 25 cents per share, according to consensus estimates from First Call.
Excluding several special items, net income for the quarter was $204 million or 27 cents per diluted share.
MCI said that a strong performance from all the company's business units enabled MCI to post its best revenue growth since 1996.
"MCI continues to execute well across all business units," said Gerald H. Taylor, MCI chief executive. "Profit margins continued to improve over the past three quarters with accelerating revenue growth from sales of data, conferencing, and managed services."
Earlier this year, MCI and Worldcom announced a $37 billion merger which is still pending regulatory approval.
"As we reach the completion of our merger with WorldCom, MCI will continue to focus on top-line growth while improving operating efficiencies," Taylorsaid.
MCI offers local services in 31 major markets where it has built local network facilities. Following the completion of the merger, MCI WorldCom will be in a position to provide local services in more than 100 markets.
The company's communications services revenue include U.S. and international voice and messaging services (long distance inbound and outbound calling, local services, call center, and wireless) and data and Internet services.
In the Internet area, MCI's revenue for the quarter grew to $89 million, an increase of 59 percent year-over-year. Earlier in July, MCI announced plans to sell its public Internet business to Cable & Wireless for $1.75 billion in order to meet the European Commission's terms for approving the merger with WorldCom. After this sale, the Justice Department also gave approval for the merger. Now the deal needs regulatory approval from the Federal Communications Commission and three states.
The companies expect to close the merger and launch MCI WorldCom in the third quarter.