WorldCom Stocks Plunge After Warning

WorldCom

After the market closed on Friday, WorldCom said its now expects revenue of $21 billion to $21.5 billion in 2002 vs. its prior outlook of $22.2 billion to $22.6 billion for the year.

The company also reduced its earnings before interest, taxes, depreciation and amortization (EBITDA) forecast to $7 billion to $7.5 billion compared with an earlier forecast of $8.4 billion to $8.5 billion.

The reduced outlook is a result of volume reductions associated with current economic conditions, including lower voice volumes and Internet data network reductions by enterprise customers, the company said in a statement.

WorldCom is expected to hold its earnings call on Thursday.

By late Monday morning, WorldCom stocks were trading at $4.18, after closing Friday at $5.98.

Several brokerage firms also downgraded WorldCom. Salomon Smith Barney lowered its rating from buy to neutral; while both CS First Boston and Guzman and Co. cut ratings to sell.