WorldCom posts mammoth loss

WorldCom posts mammoth loss

Write-downs aside, WorldCom is almost in the black

US telecoms firm WorldCom, bankrupted after an accounting scandal last year, has posted a net loss of almost $80bn in December alone after writing down some of its assets.

Overlooking the effects of the write-down - a necessary procedure for book-keeping purposes - the company made a modest operating loss of $47m on revenues of $2.2bn during the month.

Telecoms and other hi-tech companies have been writing down billions of dollars'-worth of their assets over the past couple of years, as falling stock markets force them to re-evaluate their business models.

WorldCom, although still very much in operation, has been losing market share to its solvent rivals.

AT&T, the firm's main competitor in the long-distance telephone market, said it had won about $1.7bn in contracts over the past seven months.

High hopes

US companies normally report their results on a quarterly basis.

But WorldCom, which has warned that its accounting problems may exceed $9bn, is obliged by the terms of its bankruptcy settlement to file monthly financial statements.

The company met with creditors this week to discuss its business strategy for the next three years.

WorldCom must file a reorganisation plan with the bankruptcy court by 15 April , with the aim of emerging from bankruptcy by the summer.

Last month, it said it was cutting 5,000 jobs, or more than 8%, as part of a plan to reduce annual costs by $2.5bn.