WorldCom Profit Plummets 44%on Weak Sales
WorldCom Inc.’s third-quarter earnings declined 44% after sales dropped at the MCI Group consumer long-distance phone business and profit fell at the data and international unit.
Consolidated net income at the No. 2 U.S. long-distance company slumped to $536 million from $951 million in the year-earlier period. Sales fell 11% to $8.97 billion from $10 billion.
The year-ago quarter included WorldCom’s interest in the Brazilian carrier Embratel. Excluding that investment, sales were little changed.
WorldCom was hurt by a 91% profit plunge at MCI, which has been plagued by a drop in calling prices, an increase in mobile-phone use and competition for Internet-access customers.
Businesses also are firing workers and spending less on phone services in a slowing U.S. economy, crimping growth at companies such as WorldCom and SBC Communications Inc.
“They’re in a business that’s still declining,” said Edward Paik, an analyst at Colonial Management Associates Inc. “WorldCom has a long road.”
* JDS Uniphase Corp.’s first-quarter loss grew 20% as the optical networking equipment maker continued to struggle through the economic slowdown.
For the period ended Sept. 29, JDS Uniphase lost $1.22 billion, or 93 cents a share, compared with a loss of $1.02 billion, or $1.07 a share, in the year-ago period.
Excluding special items and restructuring charges, the company lost $260 million, or 20 cents a share, compared with a profit of $177 million, or 18 cents a share, a year ago.
First-quarter revenue was off 58% to $329 million from last year’s $787 million. Analysts were expecting sales of $322 million.
The company, based in San Jose and Ottawa, was hit particularly hard by the economic slowdown as demand for communications equipment fell just as it was expanding its business through acquisitions.
* VeriSign Inc., which provides Internet registration and security services, said its third-quarter loss narrowed as merger costs declined and sales increased 47%.
The loss was $386.7 million, or $1.91 a share, compared with a loss of $1.32 billion, or $6.78, in the year-earlier period. Sales rose to $255.2 million from $173.1 million, the company said.
VeriSign, based in Mountain View, Calif., manages the database of dot-com Internet addresses and sells other Internet services, such as software for online payments.
* Electronic Arts Inc., the largest U.S. video-game software maker, said its fiscal second-quarter loss narrowed on sales of games for Sony Corp.’s PlayStation 2 console.
The loss was $32.8 million, or 24cents a share, in the period ended Sept. 30, compared with $38.9 million, or 30 cents, a year earlier, the company said. Sales rose 9% to $240.2 million from $219.9 million. Excluding certain costs, the loss was narrower than analysts expected.
Demand for game software for PlayStation 2 has remained strong amid the economic slowdown and accounted for 40% of sales, the company said.
Electronic Arts said it had three of the four best-selling games for PlayStation 2 during the quarter and benefited from demand for “Madden NFL” and “NHL 2002.”
* Barnes & Noble.com Inc.’s third-quarter loss narrowed as the second-largest U.S. Internet bookseller’s offering of free shipping to customers buying two or more items helped increase sales.
The loss narrowed to $38.3 million, or 24 cents a share, from $56.5million, or 36 cents, a year earlier, the company said.
Sales rose 7% to $96.8million from $90.9 million, beating the company’s earlier forecast for sales of at least $95 million.
Barnes & Noble.com, based in New York, began offering free shipping in July, matching a promotion by larger rival Amazon.com Inc. Barnes & Noble.com said results were affected by lower purchases in the days following the Sept. 11 terrorist attacks.
