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WorldCom 4Q lower
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February 7, 2002: 9:43 a.m. ET
Telecommunications firm misses quarterly estimate, warns on 2002 earnings.
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NEW YORK (CNN/Money) - WorldCom Group said Thursday that its fourth-quarter earnings fell sharply from a year earlier, a penny a share short of Wall Street expectations, and tried to reassure investors that it is in no danger of defaulting on its debts.
The Clinton, Miss.-based telecommunications company reported earnings in the quarter ended Dec. 31 of $384 million before one-time items, or 13 cents a share, down from $585 million, or 20 cents a share, a year earlier. The results fell short of forecasts of 14 cents a share, according to a survey of analysts by earnings tracker First Call.
In a conference call with analysts and reporters, WorldCom also reassured investors that it is not in danger of defaulting on its credit or filing for bankruptcy protection, according to a Reuters report.
"WorldCom has a solid base of bill-paying customers, strong fundamentals, a solid balance sheet, manageable leverage and nearly $10 billion in available liquidity," CEO Bernie Ebbers reportedly said. "Bankruptcy or a credit default is not a concern."
Observers have grown increasingly concerned about the possibility that WorldCom could be the next big company to suffer an accounting embarrassment after Global Crossing Ltd., Enron Corp. and others.
"The veracity of the rumors circulating about WorldCom over the last week has truly been unbelievable," Ebbers said.
Though fourth-quarter revenue increased to $5.3 billion from $4.9 billion, WorldCom also said it expects 2002 earnings of 75 to 80 cents a share, below the consensus forecast of 95 cents a share, according to First Call.
The company said it expects a mid single-digit percentage increase in 2002 revenue and earnings before interest, taxes, depreciation and amortization (EBITDA), and capital expenditures between $5 billion and $5.5 billion.
WorldCom also said it plans to keep a separate tracking stock for MCI, its consumer long-distance business, Reuters said.
Ebbers also reassured investors that he won't sell his stock in WorldCom to pay back the $198.7 million he owes the company in loans, Reuters said.
WorldCom (WCOM: up $1.06 to $7.75, Research, Estimates) shares rose in early trading Thursday, while MCI (MCIT: down $0.73 to $8.33, Research, Estimates) shares fell. 
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