If its balance sheet is any indication, MCI WorldCom is enjoying the industrywide growth in Internet and international-service business. The No. 2 U.S. carrier's net income soared 80%, to $1.28 billion, in its first quarter, compared with $712 million for the first quarter of 1999. The results--44 cents a share--topped Wall Street expectations of 43 cents a share, according to a consensus estimate by First Call.
MCI WorldCom (stock: WCOM) reported a 14% increase in revenue from communication services--the source of virtually all of its revenue--during the quarter, from $8.72 billion a year ago to $9.98 billion this year.
Internet-service revenues showed the greatest individual increase--46%--of all communications services. Sales rose to $1.10 billion for the quarter, ended March 31, compared with $758 million last year. Internet services include Web hosting, security services, and virtual private networks. Growth of international-service revenue ranked second, showing a 31% jump to $1.37 billion from $1.04 billion for the same period last year. While sales of data and voice services grew slower, they were the two largest slices of MCI WorldCom's revenue pie. Data services for the quarter were $5.36 billion, and voice pulled in $2.14 billion.
"These strong results indicate that MCI WorldCom will do very well in the new millennium as they shift their emphasis to IP and E-business services," predicts Berge Ayvazian, president of the Yankee Group. And the carrier still expects to have its proposed megamerger with Sprint Corp. approved in the second half of the year.