MCI to return $2.2 billion to shareholders

MCI today announced second quarter revenues dropped 15% year over year and it reported a loss of $71 million, but the news didn’t stop its shares from leaping up in after-hours trading. MCI announced it would begin paying a dividend of 40 cents a share in an effort to return $2.2 billion to its shareholders, which despite its poor financial performance was enough to send its share price up 20% after the markets closed.

As part of the conditions of its reorganization plan, MCI is required to identify excess capital and use it to maximize shareholder value. The MCI board identified $2.2 billion and earmarked it for those shareholders.

MCI reported revenues of $5.2 billion for the quarter, compared to $6.2 billion it recorded in the second quarter of 2003. Its net loss of $71 million was nearly nine times greater than in Q2 of 2003, which was $8 million, but still considerably smaller than its first-quarter loss of $388 million.

MCI also announced it completed the sale of its stake in Brazilian operator Embratel. MCI sold its 19% stake to Telmex for $400 million. Telmex chairman Carlos Slim Helu is also MCI’s largest investor.