MCI Posts Unexpected Loss on Higher Taxes

MCI Inc. (MCIP), which agreed to be bought for $8.5 billion by Verizon Communications Inc. (VZ) earlier this week, reported an unexpected loss on Thursday for the first quarter as taxes and interest payments rose.

MCI (search), the No. 2 U.S. long-distance telephone company, reported a net loss of $2 million, or 1 cent per share, compared with a loss of $388 million, or $1.19 per share, a year earlier. MCI, formerly known as WorldCom, emerged from bankruptcy in April 2004.

Revenues fell 12 percent to $4.8 billion.

Five analysts on average had expected MCI to earn a profit of 14 cents a share on revenues of $4.8 billion, according to Reuters Estimates.

MCI said it expects to generate operating profit before depreciation and amortization of $1.8 billion to $2.0 billion for the year, excluding merger-related costs. Analysts had expected MCI to earn $1.9 billion in operating profit.

The bidding war for MCI ended earlier this week after MCI rejected Qwest Communications International Inc. (Q) $9.9 billion offer in favor of Verizon's $8.5 billion bid, saying its large business customers preferred a Verizon merger.