WorldCom reports, warns of charge
WorldCom reports a fourth-quarter profit in line with analysts' expectations, but warns of an upcoming charge related to its acquisition of CompuServe.
The charges are the result of recently completed independent research that included a development appraisal of certain projects purchased in connection with the merger, the company said.
WorldCom reported fourth-quarter net income of $136.3 million, compared with $119.7 million reported in 1996. Fourth-quarter earnings per share was a profit of 15 cents, in line with analysts' expectations, according to First Call. A year ago, the telecommunications company reported a pro forma loss of 5 cents per share.
The company, which announced its acquisition of MCI (MCIC) during the fourth quarter and just recently completed its merger with CompuServe, said it will continue investing in 1998 in growth areas such as "local, international, Internet, and data services."
The company expects its pending merger with MCI to be completed in mid-1998, subject to approval of shareholders of each of the companies, as well as to government approval.
WorldCom reported a 63-percent jump in fourth-quarter revenues, to $2 billion, compared with $1.23 billion in revenues reported in the fourth quarter a year ago. Its international revenues increased 56 percent, to $238 million, and the company expects further international growth in 1998.
The company also said that its Internet revenues in the fourth quarter more than doubled, to $181.9 million, up from $90.5 million a year ago.
Domestic switch revenues increased 17 percent during the quarter.
The company's stock, which has gained about 27 percent since January 1, inched up in morning trading, to 38-9/16, up 3/16 from yesterday's close of 38-3/8.
Reuters contributed to this report.