Original URL: http://www.theregister.co.uk/2005/08/09/mci_results/

MCI rings up profit

Profit? Whassat?

By Tim Richardson

Posted in Financial News, 9th August 2005 13:47 GMT

MCI - the US telco formerly known as WorldCom - returned to profitability in the three months to the end of June, generating net income of $64m.

Announcing Q2 results today MCI reported that revenues had dipped from $5.2bn in Q2 04 to $4.7bn this year.

It also turned around a net loss of $71m in Q2 04 into net income of $64m.

Although revenues were down, MCI's improving financial health was due to a sizeable cut in overheads with operating expenses falling 11 per cent on the year.

Much of that that is down to a major restructuring at the US telco. Last year, for example, MCI axed some 12,000 jobs as it chopped and changed its business to cope with what it described as an "adverse industry environment".

In a statement issued today MCI boss Michael Capellas: "In the second quarter, we continued to launch next generation products and services, improve customer service and realise results from our cost reduction initiatives."

And commenting on MCI's $8.4bn take-over by rival Verizon, Capellas said that the company remains focused on "moving toward a timely completion of our merger with Verizon".

In fact, it's been a busy year for MCI. Over the last 18 months or so it has emerged from Chater 11 bankrupcy protection, rejigged its operation, became embroiled in protracted buyout talks with Verizon and Qwest, and watched along with the rest of the world to see what would happen to its former boss.

In July, Bernie Ebbers - the former head of WorldCom (now MCI) - wept in court as he was told he faced 25 years in chokey for orchestrating the world's biggest securities fraud at WorldCom.

He was judged to have masterminded the $11bn (£5.8bn) con that helped make WorldCom "become synonymous with fraud". ®

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