Updated from 11:03 a.m. EST

Long-distance telephone carrier

MCI WorldCom

(WCOM)

said Thursday that double-digit revenue gains helped drive up its fourth-quarter earnings, which came in a penny above analysts' expectations.

Separately, the

European Commission

said it had extended its deadline for reviewing the $115 billion

merger of MCI WorldCom and

Sprint

, the third-largest long-distance company, by one week after receiving unspecified "commitments" from the companies.

Clinton, Miss.-based MCI WorldCom reported a nearly threefold increase in net earnings, excluding charges, of $1.2 billion, or 42 cents a share, compared with $443 million, or 15 cents a share, in the year-earlier period.

Wall Street had expected earnings of 41 cents a share, based on a survey of analysts conducted by

First Call/Thomson Financial

.

MCI WorldCom's shares were up 2 13/16, or 6%, to 50 15/16 in afternoon trading Thursday.

After goodwill amortization, fourth-quarter 1999 earnings were $1.3 billion, or 44 cents a share, and $1.6 billion, or 54 cents a share, before goodwill amortization.

Revenues for the quarter jumped 5.3% to $9.63 billion.

F. Drake Johnstone, a telecommunications analyst at

Davenport & Co.

, said he was encouraged by MCI WorldCom's strong revenue figures as well as by an announcement in a conference call with analysts that the company expected to retain and even increase its revenue stream from

America Online

(AOL)

when some $300 million-$400 million in business from AOL comes up for renewal this summer.

"WorldCom expects a positive announcement and maybe even an expanding relationship with AOL," said Johnstone. Davenport & Co. does not do any underwriting.

Following Thursday's announcements, Johnstone raised his rating for MCI WorldCom to a buy from an accumulate and lifted his 12-month price target to $83 from $66. He noted that revenues now appeared poised to grow about 14.3% in 2000, higher than some analysts previously expected, as revenues from its Internet, data and international businesses continue to grow.

Internet revenues surged 55% in the quarter, to $1 billion, international revenues rose 50%, to $492 million, and revenues from its data business grew 26%, to $2 billion. Meanwhile, revenues from its core long-distance calling services grew a more meager 4%, to $5.2 billion.

MCI WorldCom's president and chief executive, Bernard Ebbers, said in a statement that the company's investments in "data, Internet and international have been particularly timely and have positioned the company to post industry leading incremental revenue gains, in spite of expected pressures on voice revenues."

Meanwhile, the European Commission said it had pushed back the deadline for evaluating the MCI WorldCom-Sprint merger, announced in October, to Feb. 23.

"When the parties agree to undertake certain commitments, we give a longer deadline in order to evaluate the commitments," said a European Commission spokeswoman.

Reuters

reported MCI WorldCom as saying it had not made any concessions to the commission.

On Feb. 23, the European Commission -- which reviews mergers of non-European companies if they have combined worldwide revenues of at least 5 billion euros ($4.94 billion) and European turnover of at least 250 million euros each -- is expected to either approve or deny the merger or decide to continue its investigation, a procedure that could take several more months.

Market watchers said they were confident the merger, part of a wave of consolidations in the telecommunications sector, would eventually go through.

"Look at what's going on around the globe," said Jason Graybill, a portfolio manager at asset management firm

Abner, Herrman & Brock

. "Regulators may be trying to slow down the consolidation process, but it will eventually happen." Graybill's firm has about $400 million under management. Sprint is one of the firm's top 10 positions. It does not hold shares of MCI WorldCom.

Antitrust experts believe the merged company's dominance in the Internet backbone business could be problematic for both the European Commission and U.S. regulators, who must also approve the deal.