For the fourth quarter it reported a net loss of $32m, compared to net income of $22bn in the fourth quarter of 2003, reflecting the gains related to its reorganization under bankruptcy protection. Revenues were down 10% to $4.97bn.
For the year ending December 31, the Ashburn, Virginia-based carrier reported a net loss of $3.88bn, compared to net income of $22.21bn. Sales were down 14% to $20.69bn, from $24.26bn in 2003. Meanwhile, the company revealed it had cash and equivalents of approximately $5.6bn, compared to approximately $5.9bn of debt.
MCI, formerly known as WorldCom Inc, was forced into bankruptcy in July 2002 after an $11bn fraud. It was the largest bankruptcy in US corporate history, as the company was saddled with some $41bn in liabilities. WorldCom emerged from bankruptcy in April 2004 as MCI, with just $5.7bn in debt.
The accounting fraud led to criminal charges against some former officers and directors, including former CEO Bernard Ebbers, who is currently on trial.
CEO Michael Capellas was hired in December 2002 to bring MCI out of Chapter 11, and he has since managed to slice operating costs 23% to compensate for declining sales, as he prepared the company for sale. Capellas has reduced MCI’s staff by about a third to 40,000, down from 59,000 at the beginning of 2004. That helped whittle expenses to $4.54bn in the quarter from $5.88bn in the same time last year.
On Sunday February 13, the board of MCI agreed to be purchased by Verizon for $6.75bn. However it rejected a $8bn offer from Qwest Communications, which late last week revised its cash and stock offer in an attempt to scuttle MCI’s deal with Verizon.
Looking forward to 2005, the carrier predicts that revenues will be $18bn to $19bn, a drop of 10% to 14%, MCI said in the statement. The decline will come mainly from the consumer business, the company said.
