MCI Communications Corp. on Thursday posted a big fourth-quarter loss due to costs related to employee- and customer-retention programs, technology upgrades, and restructuring efforts.
The teleco giant reported a net loss of US$391 million or 56 cents per share for the quarter compared with a profit of $303 million or 44 cents a share a year ago.
MCI said the costs included $235 million for employee- and customer-retention programs; $252 million for restructuring efforts in parts of the long distance, local, and information technology businesses; and $265 million for technology upgrades primarily to improve the performance of its data centers.
Fourth-quarter revenues increased 7.5 percent to $5.1 billion from $4.7 billion a year ago. Long distance revenues rose 5.5 percent to $4.5 billion due to strength in the company's business markets unit, which provides service to corporate customers.
For the quarter, MCI's data and Internet revenue grew 30 percent, while MCI local telephone services revenue increased to $106 million, up 116 percent from last year's fourth quarter.
"MCI showed solid improvement in the fourth quarter with revenue and traffic gains that position the company well going into 1998," said Gerald Taylor, MCI's chief executive. "With data, Internet, and IT services now accounting for a quarter of the company's revenue and growing more than 20 percent a year, MCI has effectively transformed itself into a new-era communications company," he said.
