MCI posts loss in Q2, meets revenue expectation

MCI on Thursday reported a net loss of $71 million, or 22 cents per share, for the second quarter of 2004, ended June 30, compared to net income of $8 million in the second quarter of 2003. MCI didn’t report a per-share figure for 2003’s second quarter.

MCI on Thursday reported a net loss of $71 million, or 22 cents per share, for the second quarter of 2004, ended June 30, compared to net income of $8 million in the second quarter of 2003. MCI didn’t report a per-share figure for 2003’s second quarter.

Consensus expectation from two analysts surveyed by Thomson First Call was for a loss of 96 cents per share in 2004’s second quarter.

The telecommunications company, which emerged from bankruptcy in April, reported revenue in the second quarter of $5.2 billion, a decline of 15% from the same period last year and in line with the consensus expectation from four analysts polled by Thomson First Call.

The company reported operating income of $41 million in the second quarter of 2004, compared to operating income of $324 million in second quarter 2003.

Company officials noted in a conference call Thursday that the net loss dropped from the first quarter, when the company posted a net loss of $388 million, or $1.19 per share.

In a statement, Michael D. Capellas, MCI president and CEO, praised the company for achieving “solid, measurable progress and significant financial improvements.”

MCI announced earlier this year it would lay off about 7,500 employees during the second quarter. The company paid $90 million in severance packages during the quarter, company officials said during the call.

The company also reported growth in IP services, with private IP data networks its fastest growing product line.

“No one said it’d be easy, but we’re focused on executing our plan,” Capellas said during the conference call. “We’ve made tremendous progress, but we realize we have more work to do.”

On March 31, MCI’s cash and cash equivalents totaled $5.9 billion, excluding Embratel, a Brazilian affiliate. During the second quarter, MCI paid approximately $1 billion of bankruptcy claims, and on June 30, cash and cash equivalents totaled $5.4 billion excluding Embratel.

Total debt of $6 billion included approximately $295 million of capitalized leases.