WorldCom meets fourth-quarter targets

2 min read
WorldCom (Nasdaq: WCOM) met analysts' reduced estimates for its fourth quarter and said it expects full-year revenue growth of between 12 percent and 15 percent for fiscal 2001.

Shares of the company slipped $0.19 to $19.94 in pre-session trading on the Island ECN electronic trading network.

WorldCom lowered expectations for its fourth quarter and fiscal 2001 back in November. At the time, the company also said that it would spin off its MCI business into a tracking stock in an effort to separate its struggling consumer and wholesale long-distance telephone operations from its data and Internet business.

For the quarter, the company posted consolidated net income, excluding goodwill amortization, of $710 million, or 25 cents a share, equaling analysts' reduced forecasts. The company reported net income of $1.3 billion, or 44 cents per share, excluding charges, a year earlier.

Fourth-quarter 2000 consolidated revenues were $9.6 billion, up from $9.3 billion in the same period of 1999. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) was $2.8 billion representing a margin of 29 percent.

Fourth-quarter 2000 cash earnings totaled $1.0 billion, or 35 cents a share, versus $1.6 billion, or 54 cents a share in the year-ago period.

The company said it saw strong growth in its data and Internet services businesses, which grew 28 percent year-over-year. International services revenue grew 29 percent compared to a year ago.

Data and Internet services accounted for 45 percent of WorldCom Group's revenues in the fourth quarter, up from 40 percent of revenues in the fourth quarter of 1999. The company said that revenue growth in these services accounted for over 74 percent of the Group's incremental revenue growth since the year-ago quarter.

Business voice revenues continued to decline, off 7 percent from the year-ago period and now accounted for 29 percent of the company's fourth-quarter revenues.

As for WorldCom's outlook for 2001, the company said it expects full year 2001 revenue growth of between 12 and 15 percent with quarterly growth increasing through the year. Cash earnings for the WorldCom Group are pegged at between $1.25 and $1.35 per share for the year.

Company officials said the MCI Group's cash earning are projected to be between 25 cents and 30 cents a share in 2001, and that it will generate sufficient cash flow in 2001 to service its dividend and debt requirements.

For fiscal year 2000, the company reported consolidated net income, excluding charges, of $4.6 billion, or $1.59 a share. The figure was below the $1.61 full-year earnings target from First Call.

Consolidated full-year revenues were $39.1 billion, up from $35.9 billion in 1999, above analysts' consensus figure of $34.5 billion.

Full-year consolidated EBITDA was $13.8 billion before charges, up from 1999 EBITDA of $12.2 billion. Full year 2000 cash earnings were $5.8 billion or $2.00 per share, versus $5.1 billion or $1.74 per share in 1999.