WorldCom shares jumped about 8 percent on positive remarks from the company's CEO and a bullish analyst note that raised revenue forecasts for 2001.
Shares in the long-distance telephone and data-services company were up $1.25, or more than 8 percent, to $16.44 in late-day trading, a remarkable feat considering the downward path of most technology stocks Wednesday. Earlier, shares touched $17.
Speaking at the Merrill Lynch Global Communications Investor Conference, WorldCom Chief Executive Bernie Ebbers denied industry rumors that the company may cut its growth outlook.
"Business is doing extremely well. We're not revising guidance. We stick by our guidance. We are not going to miss it. But we're not revising upward at this point," Reuters quoted the CEO as saying.
Ebbers also said WorldCom has not held merger talks with SBC Communications, adding that its depressed stock price bars it from making acquisitions.
Salomon Smith Barney analyst Jack Grubman issued a bullish research note on the stock Wednesday. Grubman reiterated his "buy" rating and said he now expects the company to see revenue growth of 14 percent, up from 13.2 percent for 2001, and revenue growth of 12.5 percent in the first quarter, as opposed to his previous estimate of 12 percent growth.
The Clinton, Miss.-based company met estimates in its most recent fourth-quarter report and said it expects full-year revenue growth of between 12 percent and 15 percent for fiscal 2001.
As for earnings, Grubman said he expects $1.25 a share from the WorldCom Group, at the low end of the company's guidance for $1.25 to $1.35 a share.
The analyst cited the company's strong traction in Europe and an improving competitive landscape as reasons for the upward revision. In the United States, AT&T is the only other player in the corporate enterprise world, and it continues to be "distracted with all of the moving parts going on within its company," Grubman added.
"If (the first quarter) is very strong, we believe it bodes well for the rest of the year," Grubman said in a research note. "We feel increasingly comfortable that each quarter, (WorldCom) will be well within its 12 percent to 15 percent annual guidance," he added.