MCI reported Q3 revenue of $5.1 billion, a decline of 3%versus Q2 2004 and 15% versus Q3 2003. Operating expenses declined significantly in the quarter, reflecting the progress of MCI’s cost reduction initiatives. Access costs fell to $2.6 billion, down 14% from Q3 2003, while costs of products and services declined 3%.
Third quarter results include previously announced non-cash, pre-tax impairment charges of $3.5 billion that reduced the carrying value of intangible assets and property, plant and equipment. As a result, MCI reported an operating loss of $3.4 billion for the third quarter, compared to operating income of $77 million in third quarter 2003. Excluding the impairment charges, the Company would have realized operating income of $121 million.
The $3.5 billion in impairment charges reduced the carrying value of assets to reflect the overall industry environment, including recent regulatory decisions that impact the prospects for MCI’s consumer business.
MCI said revenue trends are stabilizing in its key business segments. http://www.mci.com
