MCI WorldCom quadruples revenue, income

MCI WorldCom reported revenue and profits for its fourth quarter, ending December 31, 1998, that quadrupled compared with the same period a year earlier.

MCI WorldCom's net income, excluding its acquisition of Embratel Participacoes, the former state long-distance monopoly in Brazil, was $US428 million, or 23 cents per common share, compared to net income in the year-earlier quarter of $95 million or 10 cents per common share.

Its revenue of $8 billion was four times more than year-earlier quarterly revenue of $2 billion. The $8 billion does not include MCI WorldCom's acquisition of Embratel. Including that deal, MCI WorldCom's quarterly revenue hit $9 billion.

As might be expected, the company attributed the revenue growth, in part, to acquisitions, including the pairing of MCI Communications with WorldCom. The company also cited healthy internal growth as a factor.

MCI WorldCom also announced yesterday a wide ranging deal with Electronic Data Systems Corp. that will shift assets, including MCI WorldCom's IT services arm, MCI Systemhouse, to EDS. The deal, valued at around $17 billion will also shift service contracts and more than 13,000 staff.

Net income for all of 1998, excluding charges related to mergers, was $1.07 billion or 81 cents per common share. With merger-related and research-and-development charges from past quarters, the company posted a net income loss of $2.7 billion for the full year.

Communications services, excluding Embratel, brought in $7.6 billion in revenue for the fourth quarter, an increase of 17 percent over the year-earlier quarter. Voice revenue, which amounts to 62 per cent of overall revenue, was $5 billion for the quarter, for growth of 8 per cent.

Data revenue rose 29 per cent to $1.6 billion for the fourth quarter, with virtual data services such as frame relay and asynchronous transfer mode services coupling with growth in private line sales to drive that area, the company said.

Internet revenue rose 61 per cent to $658 million for the quarter, and 69 per cent to $2.2 billion for the full year, ending December 31. Those figures do not include revenue from MCI's previous Internet business because it was forced to sell that part of the company in order to win approval from federal regulators to merge with WorldCom.

International revenue jumped 55 per cent to $328 million for the quarter, and reached $1.1 billion for growth of 56 per cent for the full year. Pan-European networks and national networks in the UK, France, Belgium and Germany pushed that growth, the company said.

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