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Accounting Writedown Leads To $3.4 Billion MCI Loss

McLEAN, Va. (AP) MCI Inc., one of the nation's biggest long-distance operators, lost $3.4 billion in the third quarter of 2004 due to a previously announced asset writedown of $3.5 billion, the company announced Thursday, but its core operating results were better than expected.

Excluding the one-time charge, the Ashburn, Va.-based company would have posted a profit of $121 million, or 16 cents a share, for the July-September quarter. Analysts surveyed by Thomson First Call had predicted a profit of 5 cents a share.

The company lost $55 million in the period a year ago when it was in bankruptcy and was known as WorldCom.

Quarterly revenue dropped 15 percent to $5.08 billion from $5.97 billion a year ago. But costs from continuing operations fell 16 percent to $4.46 billion from $5.28 billion a year ago.

The company has aggressively sought to cut costs in the last year, reducing its workforce from 59,000 at the beginning of the year to 41,000. Chief executive Michael Capellas said Thursday in a phone interview that the company has now met its targets for staff cuts.

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