MCI Posts Fivefold Rise in Profit for ’88

MCI Communications earned $346 million last year, more than five times what it made in 1987, the nation’s second-largest long-distance company reported Wednesday.

It was, said MCI President Bert C. Roberts Jr., “the best year in MCI’s history.”

Roberts attributed the gain to rapid growth in a wide range of new offerings--including toll-free calling, direct dialing worldwide, operator services and a more efficient telecommunications system. The Washington-based company also landed some major corporate contracts during the year, including Procter & Gamble, Radisson Hotels and the Social Security Administration.

MCI closed the year with a fourth quarter in which revenue rose nearly 38% to $1.43 billion while profit increased fivefold to $122 million. For all of 1988, MCI earned $346 million on revenue of $5.14 billion, up from $64 million in net income last year on revenue of $3.94 billion, up 30%.

Benefiting from increased commercial business, MCI pocketed $13.50 for every $100 in sales in the fourth quarter--nearly twice the $7.20 profit margin of a year earlier.

In over-the-counter trading Wednesday, MCI stock closed at $25.75, up 62.5 cents. It was the day’s most heavily traded OTC issue, with 4.75 million shares changing hands.

Since posting a $344-million loss in 1986 stemming from the writedown of old transmission equipment, MCI has rebounded dramatically. The No. 1 long-distance company, American Telephone & Telegraph, was forced to take a similar step last week when it wrote off old equipment and registered the first annual loss in its 103-year history.