MCI WorldCom, Inc. (Nasdaq: WCOM) said Thursday that gains in Internet, international and data communications services, and the impact of the MCI merger put second quarter earnings right on target with First Call's prediction at 44 cents a share, or $857 million.
Shares in the No. 2 U.S. long distance company closed at 86 11/16 Wednesday, below their 52-week high of 96 3/4.
Revenue was $8.3 billion, an increase over the $2.6 billion for the second quarter of 1998. Second quarter core communications services revenue also rose, up 16 percent from $7.0 billion in 1998 to $8.1 billion in 1999. Including its Embratel operations in Brazil, total second quarter 1999 revenue was $8.9 billion and net income was $863 million, or 45 cents a share.
Voice minutes increased ten percent over last year, and Internet volume increased 84 percent to over 974 million hours as compared with the second quarter 1998. Voice Grade Equivalents (VGEs), which capture the volume of local data circuits, increased 77 percent to 23.6 million, the company reported.
Operating income for the second quarter 1999, excluding Embratel, was $1.7 billion -- an increase of 246 percent compared with $495 million for second quarter 1998. Operating income for the second quarter 1999, including Embratel was $1.8 billion, the company said.
"The recent divestitures of non-core assets, has provided us the financial flexibility to pursue other high growth communications services opportunities, such as our recent investments in wireless data services companies including CAI Wireless, Wireless One, Prime One, Metricom and SkyTel,'' said Bernard J. Ebbers, president and CEO of MCI WorldCom in a company release.