MCI Net Income Rises 15% To a Record $300 Million
March 31, 2011
MCI Communications Corp. reported robust growth in second-quarter net income, operating profit and revenue, reflecting continued strong expansion in its core long-distance services business. The Washington carrier reported net income of $300 million, or 43 cents a share, the highest level in MCI's history, but in line with analysts' consensus estimate, and a 15% increase from the $260 million, or 38 cents a share, reported a year ago. Operating income increased 33% to $582 million. Operating cash flow was $1 billion -- an all-time high. Revenue jumped 23% to $4.57 billion from $3.71 billion. Two-thirds of MCI's revenue comes from sales to business customers, while the remainder is from residential subscribers. The company said revenue and minutes of use for the business segment were growing at a faster clip than the residential segment. MCI expects the momentum to continue. ``We believe we ought to be able to grow minutes of use, revenue and earnings at double-digit rates over the foreseeable future,'' said Douglass Brumfield, MCI's chief financial officer. Revenue in the long-distance business increased 13% to $4.2 billion, as the company expanded its base of residential and business customers. Long-distance net income rose 34% to $372 million. Traffic volume rose 14.5%. Revenue growth was especially strong for inbound services, such as toll-free 800 numbers, as businesses increasingly order the service. MCI also benefited from the growth in data transmission, both between corporations and within individual companies, Mr. Brumfield said. The stronger operating results reflect a 6% reduction in fees MCI pays foreign carriers that carry MCI's calls abroad, and price increases for residential long-distance service. The company's nascent local-phone operations reported revenues of $44 million, a 10% increase. MCI now operates its local-phone business in 31 cities.
