Data traffic helps MCI beat estimates: net income declined 66% on anticipated charge, new-services spending

Article Abstract:

MCI's 1st qtr 1998 income of $101 million, or 14 cents a diluted share, represents a 66% decline from its 1st qtr 1997 report of $295 million, or 42 cents a share. An anticipated charge and increased investments in new services accounted for much of the dropoff, but strong growth in data traffic helped the company surpass analysts's forecasts. The results also demonstrate MCI's rebound from being an acquisition target since 1996, but its combined Internet business boom with buyer WorldCom could raise concern about their alliance. MCI applied most of its $85 million, or 12 cents a share, charge for depreciation costs linked to disposing mainframe computers. An investment in Brooks Fiber Properties, now part of WorldCom, netted a one-time gain of $31.5 million, or five cents a share. MCI would have gained $155 million, or 21 cents a share, without the charge and gain. Analysts had predicted a per-share gain of 18 cents. Revenue leaped from $4.89 billion to $5.29 billion for an 8.3% gain.

MCI Communications Corp., MCIC

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AT&T profit climbs 18%; stock falters

Article Abstract:

AT&T's 1st qtr 1998 net income of $1.33 billion, or 81 cents a share on a diluted basis, represents an 18% improvement over 1st qtr 1997's $1.13 billion, or 69 cents a share. One of the industry's strongest balance sheets was weakened by a less than 1% rise in revenue, from $12.55 billion to $12.63 billion. A 5.1% decline in consumer long-distance revenue contributed to AT&T's single greatest challenge of strengthening revenue. Chmn C. Michael Armstrong criticized investors for failing to reward AT&T's succcess in reaching targets he outlined in Jan 1998. Quarterly income included $667 million, or 26 cents-a-share gain, from the sale of its customer-service subsidiary and its holdings in LIN Television, and a charge of $601 million, or 23 cents a share, for shuttering operations that were reselling local-phone services to AT&T's long-distance customers. A 77-cents-a-share profit, excluding these items, surpassed analysts' projections of 75 cents.

AT&T Corp., T

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