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MCI tops 1Q estimates
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April 27, 2000: 1:14 p.m. ET
Long-distance carrier beats Street by a penny; sees big revenue growth in 2000
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NEW YORK (CNNfn) - MCI WorldCom Inc. reported better-than-expected first-quarter earnings Thursday and an 80 percent increase in revenue.
Including one-time items, net income for the first quarter rose to $1.3 billion, or 44 cents a share, from $712 million, or 25 cents a share, on a diluted basis, in the year-ago quarter.
Analysts surveyed by earnings research firm First Call predicted the company would earn 43 cents a share, including one-time items.
The company also said it expects 13.5 percent to 15.5 percent revenue growth in 2000 thanks to strong expansion of data, Internet and international services.
"We have indications that some of this growth may be accelerating," CEO Bernie Ebbers said in a conference call with analysts Thursday.
The company also said it may bid for British wireless carrier Orange PLC.
Germany's Mannesmann AG, which owns Orange, is looking to sell the company in order to win regulatory approval for its planned merger with Britain's Vodafone AirTouch PLC.
MCI could compete with France Telecom and Spain's Telefonica SA to acquire Orange.
"We expect to investigate that as we would any other opportunity as opposed to building out our own network," Ebbers said. "Obviously it depends on what the value of Orange is going to be...and how we could structure that. But we are curious at this point in time to see how that plays out."
Shares of MCI WorldCom (WCOM: Research, Estimates) jumped 3-3/4 to 44-5/8, a 9 percent increase, after reporting earnings.
 The company's communications services revenue grew 14 percent to $10 billion from $8.7 billion, data revenue gained 26 percent to $2.2 billion, and Internet revenue soared 46 percent to $1.1 billion. International revenue rose 31 percent to $1.4 billion.
"The good news is they turned it around a bit here. A lot of people were worried about the total growth rate, but next year almost half the revenue will be in the high growth areas," Charles Disanza, an analyst with Gerard Klauer Mattison & Co.
Drake Johnstone, an analyst with Davenport & Co., said he was pleased with the amount of growth MCI reported in the data, Internet and international services areas, which he said likely will comprise half the company's total revenue in the next year.
In October 1999, MCI said it planned to acquire smaller rival Sprint Corp. (FON: Research, Estimates) for $129 billion in an effort to develop wireless services and meet competition from AT&T (T: Research, Estimates). Sprint's PCS (PCS: Research, Estimates) cellular business, which trades as a separate tracking stock, is the nation's largest all-digital nationwide wireless service, covering more than 4,000 cities.
This week, the European Commission said MCI WorldCom might have to sell its stand-alone Internet backbone unit UUNET in order to go ahead with the Sprint merger. While MCI and Sprint previously said they would be open to divesting Sprint's Internet backbone division to win regulatory approval, the outright sale of UUNET was out of the question. 
-- from staff and wire reports
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MCI
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