WorldCom/MCI said it reduced its financial guidance for 2003-2005...
WorldCom/MCI said it reduced its financial guidance for 2003-2005 primarily because of projected reduced revenue in its consumer and small business segments. It said it expected its 2003, 2004 and 2005 revenue to be $24.5 billion, $24.6 billion and…
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$25 billion, respectively, down from previously projected $24.7 billion, $25.8 billion and $27.8 billion. The company said the revenue reductions reflected “intense pricing competition fueled by new entries of unlimited bundles, aggressive new DSL offerings and rapid adoption of national do-not-call legislation. Collectively these impacts have reduced consumers and small business effective rates in key markets by as much as 40% since April.” However, it said projections for its large and global business segments remained “relatively unchanged” for 2003 and 2004, reflecting “continued customer loyalty.” WorldCom also cut its EBITDA forecast for 2003, 2004 and 2005 to $2.7 billion, $3.7 billion and $4.1 billion, respectively, from $2.8 billion, $4.1 billion and $5.4 billion, reflecting the lower revenue projections, partly offset by lower sales, general and administrative expenses. “We believe these adjustments better reflect the changing market conditions,” MCI CFO Robert Blakely said: “We remain on track to emerge from Chapter 11 protection later this fall.” Under the revised financial projections, the return to WorldCom bondholders remains “virtually unchanged, with lower EBITDA being offset by a projected improved cash position,” the company said.