Telephone and data services company WorldCom Inc. posted a 26 percent increase in third-quarter profits Thursday on weaker-than-expected revenue, and confirmed it would unveil a restructuring plan next week.
WorldCom Chief Executive Bernie Ebbers said he will detail a plan Wednesday to focus on the company’s healthier Internet and data service businesses.
Sources familiar with the situation have said the company plans to create a tracking stock for its shrinking consumer and wholesale long-distance units.
In the third quarter, Clinton, Miss.-based WorldCom said profits, excluding one-time items, increased to $1.4 billion, or 47 cents a share, from $1.1 billion, or 37 cents, a year earlier.
The results matched the average Wall Street expectation of 47 cents a share, according to research firm First Call/Thomson Financial. Including one-time charges, WorldCom’s third-quarter net income was $967 million, or 33 cents a share.
Shares of WorldCom fell $3.50, or nearly 14 percent, to $21.75 in heavy trading on the Nasdaq stock market.
WorldCom said revenue rose 12 percent, to $10 billion, below some expectations of $10.4 billion.
In other earnings news:
– JDS Uniphase Corp. reported first-quarter net earnings that came in 2 cents above analysts’ expectations, a performance that could help ease market worries about a slowdown in the red-hot fiber-optics sector.
The results from JDS Uniphase, the world’s largest supplier of components that boost capacity and speed on fiber-optic telecom networks, are seen as an important indicator of the market’s health.
Fiber-optics-related stocks plunged after Nortel Networks Corp., the world’s No. 1 supplier of fiber-optic network systems and a JDS Uniphase customer, surprised analysts late Tuesday by saying its third-quarter sales had declined from the second quarter.
That discouraging news came one day after Lucent Technologies Inc. said its fiber-optic sales also declined. Together, Lucent and Nortel represented about 36 percent of JDS Uniphase revenue in its last quarter.
– German-American automotive giant DaimlerChrysler AG said it expected tough market conditions to worsen next year.
The group said underlying operating profit, excluding one-time items, fell almost 80 percent in the third quarter, to $448.9 million, largely because of losses of nearly $500 million at its U.S. Chrysler unit.
Chief Executive Juergen Schrempp said Chrysler would return to profitability in the fourth quarter and earnings at the troubled unit would “hold up” in 2001. DaimlerChrysler said in a statement that a variety of new products should lift unit sales and revenue in 2001.
– Dow Chemical Co. said its third-quarter profits rose a better-than-expected 2.5 percent, as it overcame sharply higher raw material costs with better sales.
Net income climbed to $328 million, or 48 cents a diluted share, from $320 million, or 48 cents a diluted share, a year ago, the company said.
Sales rose 17 percent, to a quarterly record of $5.51 billion from $4.69 billion, climbing across all its businesses and geographic areas.
