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Leaner MCI Reports That It Returned to Black in '87

February 02, 1988|From Reuters

WASHINGTON — MCI Communications Corp., the leading long-distance rival to American Telephone & Telegraph, said Monday that it returned to the black in 1987 as quarterly sales topped $1 billion for the first time and the benefits of a restructuring took hold.

For the fourth quarter, MCI earned $33 million on sales of $1.04 billion. That contrasts with a loss for the year-ago period of $502 million, including a pretax charge of $585 million from an equipment writedown and creation of a reserve for restructuring.

Sales for the 1986 fourth quarter were $920 million.

For the year, MCI's earningsreached $88 million on sales of $3.94 billion, contrasted with a loss of $448 million on sales of $3.59 billion in 1986.

The improvement "can be attributed to a steady flow of new products and services, a strengthening of the company's sales and marketing organization and the operating efficiencies resulting from the companywide restructuring in December, 1986," said Bert Roberts Jr., president and chief operating officer.

MCI said a squeeze on its profits earlier in the year from industrywide rate cuts was offset by expense controls and increases in calling traffic.

MCI, which last year introduced 800 telephone service and expanded direct-dial service to foreign countries, said it expects growth in both its commercial and residential businesses in 1988.

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