WASHINGTON-MCI WorldCom Inc. chief Bernard Ebbers, basking in glow of first-quarter earnings that surpassed forecasts, last week did not indicate whether the No. 2 long-distance telephone company is seriously interested in acquiring national wireless operator Nextel Communications Inc. any time soon.
In a conference call last Thursday, Ebbers alluded to “rumors in the paper,” without saying if recent press reports on MCI WorldCom-Nextel talks were accurate.
At the same time, Ebbers said, “We will continue as a company over an extended period of time to evaluate strategic opportunities as they come along, and we will definitely look at opportunities that will make this company successful over the longer term.”
In the near term, some Wall Street analysts say Nextel does not fit into MCI WorldCom’s game plan largely because Ebbers does not want to dilute earnings. Buying Nextel, market capitalized at $11 billion, and swallowing its $8 billion debt, would do just that.
MCI WorldCom’s netted $709 million in the first quarter of 1999, or 37 cents a share. That is a threefold increase from the $191 million (10 cents a share) that the two long-distance carriers would have generated a year ago as a combined entity.
“We feel particularly confident in our ability to sustain earnings growth in an increasingly competitive market,” said Ebbers.
Even with a big wireless play, MCI WorldCom’s revenue growth bettered that of rivals AT&T Corp. and Sprint Corp., both which have a national wireless presence. Accounting for 35 percent of MCI WorldCom’s core revenues are its Internet, international and data sectors.
Various news reports contributed to this story.
