WorldCom's False Profits Torment Telecom

Telecom's false profits are about to cast the industry's already staggering suppliers into a lake of fire and brimstone.

Evidence has been mounting over the past year that the telecommunications sector's fundamentals aren't just deteriorating -- they were never anywhere near as good as they appeared in the first place. That means that players along the industry supply chain are likely to see less and less cash from the greenback-starved big telcos. That will surely mean more pain for investors and probably more work for bankruptcy lawyers everywhere.

Take the WorldCom, please. The big telco's now twice-revised numbers show that operating profits were some 35% lower for the past three years than originally reported. On Thursday, WorldCom boosted its restatement to a staggering $7.1 billion -- and counting. ...