New president of AT&T sees a profit drain

Article Abstract:

AT&T president John R. Walter announced to Wall Street analyst that the company's earnings could decrease by approximately 30% during 1997 because of its plans to begin entering new markets. The company will spend billions of dollars as it expands into local phone services and other markets, while simultaneously dealing with fierce competition in the long distance market. AT&T plans to cut $2.6 billion in cost over the next two years. This will result in 17,000 layoffs according to AT&T but analyst believe that number will grow as the company attempts to meet its cost cutting goals. Walter predicted the company will experience robust growth following the cost cutting. He presented the analysts with AT&T's new strategy, a plan which includes decreasing the company's marketing gimmicks.

Planning, AT&T Corp., T, Walter, John R.

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Report of loss sends shares of MCI lower; 17% drop-off raises concerns about merger

Article Abstract:

MCI Communications has lost more than 17% of its market value as the stock market reacted to the company's announcement that it would lose $800 million in 1997. The announcement also affected British Telecommunications (BT), the company purchasing MCI for $24 billion. BT lost over 6% of its market value, falling $5.25 to $76.3125. MCI stocks dropped $7.375 a share to $35. MCI claims the reason for the $800 million loss is the regional Bells have refused to allow long distance companies to have access to their networks as stipulated in the Telecommunications Act of 1996. It appears that BT did not know the extent of MCI's losses until just before the announcement was made to the public. BT is meeting with MCI management to determine the extent of the company's losses for 1997.

British Telecommunications PLC, Local telephone services, Local telephone service

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MCI earnings add up despite lag in long-distance business

Article Abstract:

MCI reported a 6.7% increase in earnings for 4th qtr 1996, despite a decline in the number of long-distance calls made. Data communications and other services offered by MCI had impressive sales during the quarter. MCI finished 1996 with a net income of $303 million, up from the previous years $284 million. Stock shares rose accordingly with 44 cents in 1996, compared to 41 cents in 1995. The company's 1996 revenue was $4.75 billion, up 15% from 1995's $4.14 billion. MCI seems to be moving away from its heavy focus on market share and is becoming more business marketplace oriented. This move is expanding MCI's integrated solutions business, such as MCI One. The MCI One service has encouraged customers to keep MCI as their long distance carrier.

Company earnings/profit

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