Markets & Finance

CS First Boston Ups MCI to Neutral


CS First Boston upgraded MCI (MCIP) to neutral from underperform.

Analyst Ido Cohen says MCI's second quarter is significantly better than expected, with $5.236 billion in revenue, vs. his $5.147 billion estimate. Also, normalized EBITDA of $654 million was well above his $415 million estimate.

Cohen says EBITDA upside was driven by lower-than-expected selling, general, and administrative expenses related to a change in bad debt allowance, the reduction in consumer acquisition expenses, and better-than-expected savings from headcount reductions. He raised the 2004 estimates to $20.7 billion in revenue and $2.4 billion in EBITDA. For 2005, he upped the estimates to $18.9 billion in revenue and $2.5 billion in EBITDA.

Also, Cohen says he upgraded the stock on better-than-expected cost control at MCI, and improved outlook, and expected dividend yield support.


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