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WorldCom earnings rise
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February 19, 1998: 3:21 p.m. ET
Long-distance company reports fourth-quarter net of $142 million
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NEW YORK (CNNfn) - Long-distance telephone company WorldCom Inc., which last year launched its $37 billion purchase of MCI Communications Corp., reported fourth-quarter earnings Thursday in line with expectations.
The nation's fourth-largest long-distance company also said it would record $429 million in expenses related to its acquisition of the network operations of CompuServe completed on Jan. 31 in the first quarter.
WorldCom reported net income of $142.9 million, or 15 cents a diluted share, on revenue of $2 billion compared with income of $119.7 million, or 29 cents a diluted share, a year ago.
Those results do not include a charge of $136.3 million, or 15 cents a share, in costs related to WorldCom's merger with MFS Communications Co.
For 1997, WorldCom earned $357.2 million, or 40 cents a diluted share, on revenue of $7.35 billion, compared with pro forma net income of 414.8 million, or $1.01 a diluted share, on revenue of $5.63 billion in 1996.
Those results matched First Call's consensus estimate for the quarter and exceeded its 1997 estimate of 39 cents.
WorldCom President and Chief Executive Officer Bernard J. Ebbers said that while the MCI merger gained most of the attention in the quarter, employees deserve the credit for the success.
"It is very clear from our financial performance that our employees remained focused on delivering results. Our core management and employee strength -- which has predominantly come from successful mergers over the years -- continues to drive industry-leading performance," Ebbers said.
Revenue from domestic long-distance service in the quarter increased 17 percent to $1.06 billion from pro forma revenue of $912.6 million last year. For the year, long-distance revenue was $3.99 billion compared to pro forma revenues of $3.32 billion last year.
WorldCom's Internet revenue, which includes revenue from high-speed data connections, doubled from a pro forma $253.2 million last year to $566 million in 1997.
In late January, WorldCom completed its acquisition of Brooks Fiber Properties Inc. and its purchase the network units of CompuServe. and former America Online Inc. subsidiary ANS Communications.
The ANS and CompuServe deals were part of a complex $1.2 billion transaction that ultimately sent CompuServe's online business to America Online which in turn signed a five-year deal that made WorldCom the provider of dial-up ports for the two services.
In November, WorldCom announced it was merging with MCI Communications Corp. in a $37 billion deal. Shareholders of both companies will vote on the merger March 11. If approved, it is expected to be complete by the middle of this year.
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WorldCom
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