MCI posts profit, anticipates Verizon deal

MCI reported in its second quarter earnings report this week that it posted a positive net income of $64 million for the quarter, the company's first profit since the former WorldCom emerged from bankruptcy, in its first financial report since MCI's board of directors agreed in May to allow the firm to be acquired by Verizon Communications.

The Verizon deal is pending, and still faces a vote from MCI shareholders in the coming weeks, as wel as regulatory approvals. MCI CEO Michael Capellas credited lower operating costs and cost-cutting, including thousands of job cuts in the last year, with helping MCI attain positive income. The company has posted a loss of $71 million for the second quarter of 2004.

Still, revenue for the most recent quarter declined to $4.68 million, from $5.22 billion in the second quarter last year. Capellas acknowledged the sales difficulty, saying the market remains "challenging," but he also said he expects the Verizon deal to give MCI a leg up in the large enterprise market.

In other news related to MCI, Buford Yates, who had been the director of general accounting for WorldCom prior to the bankruptcy, was sentenced Wednesday to a year and a day in prison for his role in the $11 billion accounting scandal that led to the bankruptcy. Yates had previously pleaded guilty.