WorldCom posts flat revenue, sees $80bn in charges

Bankrupt telephone and data services company WorldCom said its net loss narrowed in December as revenues remained flat, and it...

Bankrupt telephone and data services company WorldCom said its net loss narrowed in December as revenues remained flat, and it would take almost $80bn in charges to write off the value of goodwill, property, equipment and other intangible assets.

WorldCom's net loss from continuing operations, before reorganisation items, narrowed to $47m on revenues of $2.2bn in December. That compared with a net loss from continuing operations of $194m on revenues of $2.2bn in November.

WorldCom's rivals have claimed that they are winning customer accounts and market share as customers pare their business with WorldCom.

AT&T, the number one US long-distance telephone company, said it had won about $1.7bn in contracts over the past seven months. Meanwhile, Sprint, the fourth US long-distance company, has said it won about $400m in contracts from about 200 corporate customers since May 2002.

WorldCom, which has warned that its accounting problems may exceed $9bn, must file monthly financial statements with the bankruptcy court during its Chapter 11 reorganization. WorldCom's capital expenditures for December were about $108m, up from about $48m in November.

The company said it ended December with about $2.5bn in cash on hand, an increase of about $200m from the beginning of the month.

WorldCom also said it would write down $45b in goodwill, and reduce to $10bn from $44.8bn the value of its property, plant and equipment and other intangible assets. Those write-downs will result in total charges of about $79.8bn.

The company, which last year filed for the world's largest corporate bankruptcy, met with creditors this week to outline its business strategy and priorities for the next three years.

Details of its business plan were not disclosed, but the company must file a reorganization plan with the bankruptcy court by 15 April. It aims to emerge from bankruptcy around mid-year.

WorldCom previously said it would target sales to small and mid-sized businesses, expand into more local telephone markets, and change its calling plans to try to strengthen revenues. It also aims to boost sales to corporations by broadening its network integration and consulting services.

Last month the company said it would cut 5,000 jobs, or more than 8% of its work force, and trim annual costs by $2.5bn.

Two reports examining review WorldCom's past accounting practices and corporate governance issues are expected to be released in the next few months. Court-appointed examiner Richard Thornburgh is expected to release an updated report by May, sources familiar with the situation said.

Meanwhile, the Wall Street Journal reported on Wednesday that federal prosecutors in New York asked independent investigator William McLucas to delay the release of his report until June, saying that public disclosure of the report would harm their ongoing investigation into former WorldCom executives.

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