MCI profit up 20% in quarter toll-call operating net rose 36%

April 25, 1996|By Michael Dresser | Michael Dresser,SUN STAFF

MCI Communications Corp. ran up the score against AT&T during the first quarter, posting a robust 36 percent gain in long-distance operating income compared with its chief rival's 5.4 percent.

In a report released yesterday, Washington-based MCI said its net income increased 20.9 percent compared with last year's first quarter. Earnings grew to $295 million, or 42 cents a share, compared with $244 million, or 36 cents a share, during the comparable quarter last year.

MCI's revenues showed a 26 percent increase, to $4.5 billion, while the core long-distance business showed a 14.1 percent gain. AT&T's revenue gain, reported earlier this month, was only 4.6 percent.

The difference between operating and net income was largely accounted for by investments in new ventures that are still in the process of ramping up, such as local telephone service and wireless ventures. New ventures generated $476 million in revenue and a loss of $83 million.

MCI's traffic volume increased 21 percent, even more than Sprint Corp.'s healthy 17 percent gain and almost triple AT&T's 7.7 percent increase.

Barry Sine, telecommunications analyst at SBC Capital Markets, said MCI turned in a "very strong" performance that cut into AT&T's market share.

But Mr. Sine added that much of MCI's market share growth likely came from strong sales of wholesale long distance services to other carriers. MCI shares rose $1.50 yesterday, closing at $29.875.

Pub Date: 4/25/96

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