MCI

(MCIP)

posted a narrower first-quarter loss Thursday despite a 12% revenue drop.

The Ashburn, Va., long-distance telco lost $91 million, or 28 cents a share, from continuing operations in the latest period. That compares with a year-ago loss of $386 million, or $1.18 a share. Revenue fell to $4.79 billion from the year-ago $5.42 billion.

Operating income was $115 million for the quarter compared to an operating loss of $270 million in the comparable 2004 period. The company reaffirmed its guidance for 2005 revenue of $18 billion to $19 billion.

The earnings report comes just days after MCI and

Verizon

(VZ) - Get Report

agreed to a sweetened $8.4 billion merger, prompting rival

Qwest

(Q)

to finally drop out of what had turned into a nearly three-month bidding war.

MCI closed Wednesday at $25.29.