Struggling U.S. telecommunications company WorldCom Inc. on Thursday posted a loss for its first quarter, pointing to a decline in business from corporate customers who are themselves suffering due to a weak economy.
The WorldCom group, composed of the company's Internet services businesses as well as corporate telephone and international businesses, reported net income of US$184 million or $0.06 per share for the quarter ended March 31, which included a $90 million after-tax charge associated with the disposition of investments, such as News Corp., WorldCom said in a statement.
The results compare to net income of $532 million or $0.18 cents per share for the first quarter of last year, the Clinton, Mississippi, carrier said. Analysts polled by Thomson Financial/First Call had expected a profit of $0.17 cents per share for the first quarter in 2002.
Revenue for the quarter was $5.1 billion, a 2 percent decline from the same period a year ago. Data and Internet services revenues fell by about 1 percent to $2.75 billion, while revenue from the company's voice business dropped 12 percent on a 2.5 percent decrease in calling volume, WorldCom said.
WorldCom characterized the telecommunications services market as continuing to be "unpredictable," and forecast full-year revenue for 2002 of between $21 billion to $21.5 billion.
WorldCom's MCI group, the long-distance and consumer-services division spun out last year as a tracking stock, posted a first quarter net loss of $54 million or $0.45 cents per diluted share, the company said in a separate statement. Analysts polled by Thomson Financial/First Call had expected a loss of $0.43 cents per share for the quarter.
The company's outlook for its MCI group remained muted, with the group expected to post a half-year loss in revenue that as a percentage will be in the mid-teens compared to the first half of last year, WorldCom said. In the second half of 2002, WorldCom MCI group is expected to post a percentage decline in revenue in low double-digits, the company said.
WorldCom was able to cut its net debt in the first quarter by $903 million to $27.9 billion, the company said. Earlier this month, WorldCom said it was cutting 3,700 of its positions from its data services division, a 6 percent reduction in its U.S. workforce.