From: technews <technews@ou.edu>
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Subject: it-fyi: MCI Worldcom Says Profit More Than Tripled (NY Times on t
Date: Fri, 29 Oct 1999 07:35:28 -0500
October 31, 1999
MCI Worldcom Says Profit More Than Tripled in 3d Quarter
By BLOOMBERG NEWS
CLINTON, Miss. -- MCI Worldcom Inc., which is acquiring the rival Sprint
Corporation in what will be the largest corporate takeover ever, said
Thursday that its third-quarter profit more than tripled as demand for data
services surged.
MCI Worldcom, the No. 2 United States long-distance company after AT&T, said
net income rose to $1.1 billion, or 55 cents a share, from $359 million, or
19 cents, a year ago with results restated for the purchase of the MCI
Communications Corporation. The results slightly exceeded the average
forecast of 54 cents a share by 25 analysts surveyed by First Call.
MCI Worldcom said its cash flow margin, or earnings before interest, taxes,
depreciation and amortization, rose to 35 percent from 25 percent. Cash flow
is used to measure the underlying performance of the operations of companies
with large amounts of debt or capital expenses. The chief executive,
Bernard J. Ebbers, who has acquired more than 60 companies this decade, is
focusing on cost control and fast-growing services like data, Internet and
international operations. The company is benefiting from
higher-than-expected savings from its purchase of MCI last year.
"The scope of their network is giving them a lot of advantage in signing up
business customers for voice, data and everything else," said Mel Marten, an
analyst at Edward Jones & Company who has a "strong buy" rating on the
stock.
Revenue rose 11 percent, to $8.52 billion from $7.67 billion. That was
faster than revenue gains of 5.6 percent at AT&T and 7.4 percent at Sprint.
MCI Worldcom agreed earlier this month to buy Sprint for $129 billion. The
new company, to be called Worldcom, will control about 30 percent of the
long-distance market in the United States.
Shares of MCI Worldcom, which is based in Clinton, rose $6.0625, to $83.625,
after the report. The stock has risen more than sixfold in the last five
years, more than double the rise in the Standard & Poor's 500-stock index.