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New services drive up MCI’s quarterly profits

MCI Inc., the telecommunications provider being acquired by Verizon Communications Inc., said Thursday it earned $271 million in the third quarter, helped by new services and the absence of large impairment charges that led to a loss a year ago.
/ Source: The Associated Press

MCI Inc., the telecommunications provider being acquired by Verizon Communications Inc., said Thursday it earned $271 million in the third quarter, helped by new services and the absence of large impairment charges that led to a loss a year ago.

MCI posted net income of 82 cents per share for the three months ended Sept. 30 versus a loss of $3.4 billion, or $10.65 per share, a year ago. Results for the latest quarter included a tax reduction of $164 million, while the 2004 quarter included impairment charges of $3.5 billion.

MCI said it had operating income of $159 million in the latest quarter, up from $61 million in the second quarter of 2005. MCI said the improvement reflects the benefits of new products and cost-cutting plans launched last year.

Revenue fell 5 percent to $4.47 billion from $5.08 billion a year ago. MCI’s enterprise business, which includes its high-end business and government accounts, as well as Internet services, saw revenue decline by 3 percent, as a decline in traditional voice business was partially offset by continuing growth in private Internet-related services and managed network services.

New services provided to its largest customers helped the segment grow operating profit by $21 million from the second quarter. The segment lost money a year ago due to a large impairment charge.

Verizon recently received regulatory clearance for it $8.5 billion purchase of MCI, a major provider of network services to corporate and government clients.