MCI Inc., the long-distance phone company being bought by Verizon Communications Inc., posted its first profit since emerging from bankruptcy in April 2004.
Net income was $64 million, or 19 cents a share, contrasted with a net loss of $71 million, or 22 cents, a year earlier, MCI said Tuesday. Sales fell 10% to $4.68 billion.
MCI sold a stake in a Mexican unit and recorded a tax benefit and gains from investments that added a total of $122 million to earnings. Chief Executive Michael Capellas reduced expenses 11% to help Verizon wring benefits from the $8.46-billion deal, expected to close next year. Sales to large companies fell 2.6%, the smallest decline of Ashburn, Va.-based MCI's three divisions.
New York-based Verizon, the largest U.S. telephone carrier, is buying MCI to gain access to the company's 140-nation phone and data network as well as contracts with corporate customers including Hewlett-Packard Co. MCI reported $22 million in costs from the merger.