WorldCom Group Q2 earnings meet estimates

WorldCom Group notched normalized pro forma earnings (after goodwill amortization) for the second quarter 2001 of $574 million, or 20 cents per share, down 26% year over year, but in line with the consensus estimate of analysts polled by Thomson Financial/First Call.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter were $2 billion, a $32 million increase over the same quarter last year.

WorldCom reported revenues for the quarter of $5.4 billion, a 12% increase from the year prior. Driving the increase was data and Internet services, which posted a 22% year-over-year increase for the quarter.

This sector accounted for about $3 billion—or 55%—of WorldCom’s revenues for the quarter, up from 51% of revenues in the second quarter 2000. Moreover, data and Internet services accounted for 92% of WorldCom’s incremental growth quarter over quarter.

WorldCom President and CEO Bernard J. Ebbers said he was especially pleased with the results given the economic conditions that generally have ravaged the telecommunications industry.

“Obviously, WorldCom is being affected by the economic slowdown like everyone else. We can’t tell with certainty when the economic outlook will improve, and competition continues to be very tough” he said during this morning’s analyst conference call. “But irrespective of all that, we continue to deliver growth that will allow us to achieve our revenue growth target.”

The company also reported that it’s internal cash flow improved by more than $600 million during the quarter, as cash from operations increased, and cash used in investing activities decreased. In the past two quarters, internal cash flow improved by nearly $2 billion, as cash flow from operations increased by more than $1 billion, and cash used in investing activities declined by nearly $1 billion.

“Our company has been extremely cash focused in recent quarters, and our efforts this quarter produced outstanding results,” said Scott Hamilton, vice president of investor relations. “In fact, this quarter we generated the largest total of cash provided by operating activities and the smallest total of cash used in investing activities in the past six quarters.”

WorldCom estimated that its full-year 2001 EBITDA would be between $7.8 billion and $8.3 billion, with cash earnings expected to be between $1.05 and $1.10 per share.