WorldCom reported net income of $729 million, or 25 cents per share, on revenue of $9.7 billion for the quarter ended March 31. That's down from $1.28 billion, or 44 cents, in the year-ago quarter. Analysts were expecting the company to report earnings of 25 cents per share and revenue of $9.8 billion, according to First Call.
The Clinton, Miss.-based company reported an after-tax charge of $76 million associated with previously announced layoffs. In February, the company let go about 6,000 workers, roughly 6 percent to 7 percent of its work force.
It also incurred a $94 million expense charge related to currency issues with its Brazilian Embratel division.
The WorldCom group, which includes the company's data, Internet, international and commercial voice divisions, reported revenue of $6.1 billion, up 12 percent from a year ago.
Sales were particularly strong in Internet services, where revenue rose 22 percent. Data and Internet services accounted for $2.8 billion, or 45 percent, of the group's revenue. Net income for the group was $638 million, or 22 cents per share.
The company's MCI group, which includes consumer, small business, wholesale long-distance, wireless messaging and dial-up Internet access, did not do as well. Sales slipped from $4.2 billion in the year-ago quarter to $3.6 billion, although consumer long-distance and local services saw revenue growth. But slow sales in transaction brands and calling card services as well as wholesale and resale services offset that growth.
The MCI group posted net income of $91 million, or 3 cents per share.
Looking ahead, the company said it expects revenue for the full year for the WorldCom group to grow 12 percent to 15 percent from the preceding year, and earnings per share for that group of between $1.25 and $1.35. For the MCI group, it sees cash earnings of between 25 cents and 30 cents per share, with revenue declining sequentially. That matches previously issued guidance from the company.
The company still plans to create a tracking stock for consumer and wholesale long-distance operations. CEO Bernard Ebbers said that the company will mail documents to shareholders next month and hold a vote on the issue in June.
WorldCom cut its outlook for the year last November, citing weakness in its long-distance telephone business. Despite the slew of warnings from other telecom companies, the stock got a boost earlier this year after Ebbers reiterated the company's outlook at an investment conference. Ebbers also discounted rumors that the company would put itself up for sale.