WorldCom's revenue up, matches lowered expectations

WorldCom Inc. on Thursday reported that its first-quarter revenue grew 12 percent to US$9.7 billion while its earnings also matched lowered expectations.

Revenue was up from $9.6 billion in the same quarter last year, the company said in a statement. For the first quarter, ended March 31, cash earnings were $1 billion or $0.35 a share, WorldCom said. Consolidated net income, after goodwill amortization, was $729 million or $0.25 a share, matching the consensus expectations of 14 analysts, according to First Call/Thomson Financial.

WorldCom is split in two divisions. Its WorldCom group, which includes its data, Internet, international operations and commercial voice services, reported revenue of $6.1 billion, a 12 percent increase over the same period in 2000. The company saw 22 percent year-over-year revenue growth in data and Internet services and 19 percent revenue growth in international services.

The company's MCI group, which is the Jackson, Mississippi-based telecommunication provider's consumer, small business, wholesale long distance, wireless messaging and dial-up Internet access business, reported revenue of $3.6 billion for the quarter compared to $4.2 billion for the same time last year. MCI Group saw revenue growth in consumer subscription long distance and local services, despite industry trends to the contrary, the company said. However, the group saw a downturn in calling card services, among other business areas, which are being adversely impacted by customers moving to wireless services, the company said.

MCI group reported cash earnings of $158 million or $0.05 a share. The group had a net income of $91 million or $0.03 a share.

WorldCom took after-tax charges of $76 million for domestic severance packages and other costs related to layoffs. The company also incurred $94 million of expenses from the foreign currency exchange on Embratel Participacoes SA, WorldCom's Brazilian communications company.

The company expects the WorldCom group revenue to grow 12 percent to 15 percent and expects World group's cash earning between $1.25 and $1.35 per share for the year. WorldCom, however, expects declining, but stabilizing sequential revenue from the MCI Group.

The MCI group expects earnings between $0.25 to $0.30 per share for the full year. WorldCom also said it expects the MCI group to generate sufficient cash flow in 2001 to service its anticipated dividends and allocated debt.

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