Strong Revenue Gains Across All Communications
Services
Merger Synergies With MFS On Track
JACKSON, MS (April 30, 1997) WorldCom, Inc.
(Nasdaq/NM:WCOM) today reported first quarter revenues of $1.68
billion, an increase of 62 percent from first quarter 1996 revenues of
$1.03 billion. The year-over-year increase is due to both the merger
with MFS Communications Company, Inc., (MFS) on December 31, 1996, as
well as strong internal growth across all communications services. On a
reported basis, long distance traffic increased 52 percent over the
previous year.
Net income before preferred dividends for the first quarter 1997 --
taking into account the increased amortization of goodwill of $84
million related to the merger with MFS -- was $49.7 million, or $0.05
per common share, compared with net income of $86.3 million, or $0.21
per common share for first quarter, 1996. The non-cash amortization of
goodwill of $84 million, alone had a nine cent impact on earnings per
share for the quarter.
Bernard J. Ebbers, president and chief executive officer of
WorldCom, Inc., stated, "Our strong results clearly underscore the
importance of the recent merger with MFS and highlight the value of
being a full service, facilities-based communications provider. Our
revenue base has never been more diversified, and this balanced
portfolio of service offerings positions us to deliver ongoing
market-leading growth as characterized by the strong internally
generated growth rates of the combined operations."
COMMUNICATIONS SERVICES - PRO FORMA COMPARISON
WorldCom's first quarter highlights include the following
year-over-year internal growth:
FIRST QUARTER 1997 ($ MILLIONS) Revenues Actual Pro Forma Change Domestic Switched $ 951.9 $ 774.0 23% Other revenues 97.6 80.6 21% Total Revenues $1,677.2 $1,243.8 35% |
Domestic Switched Services revenue for the first quarter experienced
a 23 percent year-over-year increase driven by a gain of 31 percent in
traffic. This increase was due primarily to strong volume gains and
more stable pricing in the business market. Carrier traffic growth,
year-over-year, was particularly strong.
Domestic Private Line revenues for the first quarter experienced a
34 percent year-over-year increase due primarily to increased demand
for higher capacity circuits for corporate intranet and other Internet
related services.
International revenues -- those revenues originating outside of the
United States -- for the first quarter were $164 million, an increase
of 89 percent, as compared with $87 million for the prior year first
quarter. This performance is due to continuing strong traffic growth in
the United Kingdom and a growing presence in Continental Europe.
Internet revenues for the first quarter were $111 million, up 185
percent over the prior year first quarter of $39 million.
OTHER REVENUES
Other revenues for the first quarter were $98 million, up 21
percent, as compared with $81 million for the comparable period in the
prior year. Other revenues include MFS Network Technologies, operator
services, broadcast operations, and other equipment and software
sales.
OPERATING RESULTS
Operating Income for the first quarter of 1997 was $171 million
compared to $196 million in the same period of 1996. The 1997 first
quarter results include MFS goodwill amortization of $84 million. Under
purchase accounting treatment of the MFS merger, 1996 results are not
similarly impacted.
PRO FORMA COMPARATIVES
In order to compare the year-over-year internal growth, the
following table reflects pro forma amounts for first quarter 1996:
FIRST QUARTER ACTUAL PRO FORMA Amount Revenue Amount Revenue |
(1)
Adding back MFS purchase accounting amortization
($0.09) and cash utilization of MFS tax loss carry forwards
($0.06).
OUTLOOK
Commenting on the outlook for WorldCom, Ebbers said: "I am
particularly pleased with our first quarter financial performance as a
combined entity. The merger and subsequent integration process has been
very smooth. With the organizational changes behind us, and a much more
diversified revenue mix, I have increasing confidence in our ability to
create further value for our stockholders."
ADDITIONAL FINANCIAL INFORMATION
WORLDCOM, INC. AND SUBSIDIARIES For the Three Months ------------------------------------------------------------------------ Revenues $ 1,677,239 100.0% $ 1,034,060 Total 1,506,719 89.8% 838,203 Weighted average shares outstanding : Private line revenues $ 379,843 $ 213,714
WORLDCOM, INC. AND SUBSIDIARIES For the Three Months ------------------------------- ------------------------------- Primary: Fully diluted: Income applicable to common shareholders $ 43,054 $ Earnings per share:
WORLDCOM, INC. AND SUBSIDIARIES March 31, 1996
WORLDCOM, INC. AND SUBSIDIARIES March 31, 1996 Earnings (loss) per common share: extraordinary items: Primary $ (0.10) Primary 859,070 |
Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements that
involve risks and uncertainties as detailed from time to time in
various regulatory filings. Actual results may vary significantly from
these statements.
WorldCom is a global business telecommunications company. Operating
in more than 50 countries, the company is a premier provider of
facilities-based and fully integrated local, long distance,
international and Internet services. WorldCom's subsidiary, UUNET
Technologies, Inc., is the world's largest provider of Internet
services. WorldCom's World Wide Web address is
http://www.wcom.com
. The common and depositary shares of WorldCom trade on the Nasdaq
National Market (U.S.) under the symbol WCOM and WCOMP,
respectively.
