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WorldCom profit tumbles
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February 8, 2001: 10:33 a.m. ET
No. 2 long-distance carrier's 4Q profit off more than 40%, revenue edges up
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NEW YORK (CNNfn) - WorldCom Inc. reported Thursday that fourth-quarter earnings dropped more than 40 percent as weakness in its long-distance business dragged down results.
WorldCom, the No. 2 U.S. long-distance phone company after AT&T (T: Research, Estimates), earned $710 million, or 25 cents per diluted share, down from $1.3 billion, or 44 cents per share, in the 1999 period. The latest results, which exclude certain write-offs, matched the lowered expectations of analysts surveyed by earnings tracker First Call Corp.
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VIDEO
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 CNNfn's Jennifer Westhoven takes a peek at Worldcom's quarterly numbers. |
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Real
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Total revenue increased 3.3 percent to $9.63 billion from $9.32 billion in the 1999 fourth quarter.
Revenue from the WorldCom group jumped 15 percent to $5.9 billion, boosted by a 28 percent increase in data and Internet services sales and a 29 percent gain in international services. But revenue from the MCI Group fell to $3.8 billion from $4.2 billion in the 1999 quarter amid sluggish sales for calling card services and other offerings that are replaced by mobile phone use.
Last November, WorldCom warned of lower-than-expected fourth quarter results and said it would split in two, creating a tracking stock to separate its data and Internet businesses from its struggling long-distance operations. The move came after the Clinton, Miss.-based carrier dropped its $129 billion takeover bid for Sprint (FON: Research, Estimates), the No. 3 U.S. long-distance company, because of regulatory obstacles.
"Since announcing our intention to separate the company's businesses into growth and mature segments, WorldCom has made excellent progress," President and CEO Bernard J. Ebbers said in a statement. "We are addressing those areas of our business that are mature and already have begun to manage them more appropriately – focusing on cash returns."
The company did not comment on reports that it is expected to lay off up to 15 percent of its 77,000 work force in an effort to cut costs.
WorldCom (WCOM: Research, Estimates) shares gained 69 cents to $20.81 in morning trading Thursday. The stock is trading about 61 percent below its 52-week high of $52.50. 
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