MCI Communications Corp., the nation's second largest long-distance company, said yesterday that its first-quarter earnings were down 66 percent from the same quarter last year, due in part to a $137 million computer-equipment depreciation charge.
The company reported $101 million in quarterly net income, or 14 cents per diluted share. Last year, MCI had $295 million in first-quarter net income, or 42 cents per diluted share.
In addition to the depreciation charge, MCI's earnings also reflected a $51 million gain from the company's investment in Brooks Fiber Properties Inc. This gain was realized when another big long-distance firm, WorldCom Inc., bought Brooks Fiber.
Last November, WorldCom announced that it is buying MCI for $37 billion. The purchase is expected to close this summer.
Excluding the depreciation charge and the investment gain, MCI had $155 million in net income, or 21 cents per diluted share, down 48 percent from last year's first quarter.
This showing was slightly better than expected; major earnings-forecasting services had predicted that MCI would post earnings of 18 or 19 cents per share.
Charles A. DiSanza, an analyst for Gerard Klauer Mattison & Co. Inc. in New York, said that MCI's earnings downturn reflected the company's continued bid to build up services outside of the long-distance market. "They're still spending money on getting into local," he said.
MCI said the volume of calls on its network was up 13.8 percent in the quarter.
Pub Date: 5/01/98