WorldCom's quarterly earnings down 40 percent

WorldCom Inc. reported today that its earnings were off 40 percent compared with the same period a year ago, down from US$1.6 billion to $1 billion.

Worldcom warned analysts last November to expect lower earnings in the fourth quarter. The company reported fourth-quarter consolidated revenue of $9.6 billion and consolidated net income of 25 cents per share, which was in line with analyst estimates from Boston-based First Call/Thomson Financial.

According to analysts, the drag in WorldCom earnings came from its voice businesses, which sell standard telephone services. Voice revenue from business customers was down 7 percent, the company reported. WorldCom's MCI group, which provides long-distance voice services to consumers, took a negative hit in quarterly revenue of nearly a half-billion dollars, reporting $3.8 billion compared with the $4.2 billion reported for the same period last year.

The telecommunications company's WorldCom Group, which focuses on selling data services to businesses, reported group revenues of $5.9 billion, an increase of 15 percent compared with the same quarter last year. The company attributed that increase to a 28 percent year-over-year growth in its data business and a 29 percent increase in its international business.

The company announced a restructuring in November that involved the creation of two tracking stocks -- one for its big-business services and another for services to smaller businesses and consumers.

The WorldCom Group received 45 percent of its fourth-quarter revenue from data and Internet services, the company said. The data and Internet segment grew by 40 percent in the quarter, compared with the same period in 1999.

For the year 2000, WorldCom reported cash earnings of US$5.8 billion, up from $5.1 billion reported in 1999.

WorldCom officials didn't address rumors of layoffs during the webcast. WorldCom spokesman Charles Sullivan said he couldn't comment on any speculation about a reduction in the company's workforce. WorldCom, based in Clinton, Mississippi, employs 77,000 people.

George A. Chidi Jr. of the IDG News Service contributed to this report.

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