MCI Inc has posted a net loss and a 15% decline in sales for the second quarter, months after emerging from Chapter 11 bankruptcy protection. However, it offset the decline with the news it is starting to return some of its spare cash to shareholders.
For the second quarter ending June 30, MCI reported a net loss of $71m, as opposed to net income of $8m in the year-ago quarter. Sales were down 15% at $5.23bn.
The Ashburn, Virginia-based company, which was formerly known as WorldCom, declared that it had excess cash of $2.2bn on its balance sheet and announced it would start to pay a quarterly dividend of $0.40 per share.
The announcement was welcome news for MCI’s shareholders, who have seen the company rocked by regulatory set-backs and intense price competition in the telecom industry after it emerged from Chapter 11 year.
Michael Capellas, chairman and chief executive, said selling, general and administrative costs in the second quarter were $290m lower than in the first three months of the year as MCI slashed jobs and cut back on marketing. Capellas said the company’s workforce has shrunk by more than 20% to 44,800 since the beginning of the year, and is expected to reach 41,300 by the end of 2004.
The only way for us to remain competitive is to deliver operational improvements. We are adjusting to the evolving market conditions and executing against our business plan, he said.
