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Thu Aug 5, 2004
WASHINGTON (Reuters) - MCI Inc. (MCIP.O: Quote, Profile, Research) on Thursday reported a second-quarter loss as the company waged a price war in long-distance telephone service.
The company also announced it was launching a quarterly dividend of 40 cents per share, part of a plan to return $2.2 billion in cash to shareholders.
MCI said its losses totaled $71 million, or 22 cents a share, compared with earnings of $8 million in the same period a year ago, when it was still operating under the WorldCom name and working though the largest bankruptcy in U.S. corporate history.
Revenues fell 15 percent to $5.2 billion.
MCI has struggled to lower costs in the midst of a price war with AT&T Corp. (T.N: Quote, Profile, Research) and dominant U.S. local telephone companies. It had previously announced plans to cut 15,200 jobs this year, or about 28 percent of its work force.
MCI said it lowered its sales, general and administrative costs to $1.3 billion in the second quarter, a 17 percent reduction over the same period a year earlier.
The company said it had $5.4 billion in cash on hand at the end of the second quarter after paying out $1 billion in bankruptcy claims.
MCI said its board of directors had decided that the best use of its excess cash was the dividend. The first payment will be made in September.
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