Currently planning the largest corporate takeover in history, MCI WorldCom Inc has reported third-quarter net income that more than tripled to $1.09bn, or $0.55 a share, compared with $359m, or $0.19 per share, a year earlier. The acquisitive company took charges in the quarter of $359m, or $0.19 per share, for merger costs relating to the MCI and Embratel deals. The result beat analyst consensus estimates of $0.54 per share by a penny.
Total revenue stood at $9.2bn. This included revenue from Embratel Participacoes SA the Brazilian long-distance carrier in which MCI WorldCom bought a 19% controlling stake in last year. Pro-forma results, excluding Embratel, saw net income up $1.1bn on revenues up 11%, to $8.52bn.
MCI WorldCom acquired Embratel last year during the privatization sale of state-owned Tellers. Including Embratel, revenue for the latest third-quarter was $9.2bn, the company said. The results for the third quarter of last year are on a pro forma basis, excluding merger costs. Third-quarter earnings before goodwill amortization, or cash earnings, came to $1.4bn, or $0.71 per share.
Voice traffic originating in the US is still responsible for more than 61% of MCI WorldCom’s revenues. In the third quarter, the revenues from voice traffic grew 6% while revenues from the service also rose 6% to $5.2bn. The even percentage rise showing the company’s margins are not suffering from the recent round of price cutting in the US consumer long distance market. Over the same period the company reported Data revenues up 28% at $1.94bn; internet revenues up 57% to $924m and International revenues up 54% at $464m.
Data revenues in the US were hit by the serious outage that the company’s frame relay network suffered during August. In all the company took a $29m cut in revenues as it compensating customers that suffered from the 10 day outage with service credits.
MCI WorldCom agreed in September to acquire Sprint in a deal worth more than $125bn. The deal will give MCI WorldCom the national wireless phone service it’s long coveted. MCI WorldCom closed the day up 7.82% at $83.625.
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