Emerging businesses spur Bell Atlantic in quarter 11% rise in profits credited to cellular, ISDN services

April 18, 1997|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF Bloomberg News contributed to this article.

Bell Atlantic Corp. made its money the new-fashioned way in the first quarter -- by growing emerging businesses such as cellular and the Internet much faster than traditional phone service on the way to an 11 percent overall gain in quarterly profits.

The Philadelphia-based firm, which is the dominant local phone service provider throughout Maryland, said that on March 31 its cellular business had almost 30 percent more subscribers than a year before, while the total number of Integrated Service Digital Network lines rose 45 percent. ISDN is a high-speed phone line that many customers use for data transmissions, especially surfing the Internet.

"Demand for our services continues to drive excellent bottom-line performance," Bell Atlantic Chairman Ray Smith said.

Overall, Bell Atlantic earned $515.6 million, or $1.17 a share, during the first quarter of 1997. The performance matched analysts' average per-share estimate to the penny, according to a survey by IBES International Inc. The company earned $1.06 a share in the first quarter of 1996. Total operating revenue was $3.4 billion, up almost $200 million from last year.

Calling volume, measured in minutes, grew 3 percent and revenue from the phone businesses grew 4.5 percent. The profit gain was bigger, in part, because cost controls kept network operating expense gains to only 1.6 percent.

The company also disclosed that it has added about 4,700 employees in the last year, bringing its total to 65,900.

Throughout Bell Atlantic's report, newer businesses showed much faster growth than the basic local phone services and leasing of parts of the company's network to long-distance companies.

Installations of second lines for consumer accounts, which are -- increasingly used to connect modems to the Internet, rose to 245,000 during the quarter, up 20 percent from last year at the same time. The company plans to sell a million second lines this nTC year. High-value phone services like caller ID and home voice mail grew 20 percent, as caller ID posted a 61 percent jump in sales.

In the business market, sales of packet data transmission, a much faster way of moving data over phone lines than traditional frame relay, rose more than 100 percent.

By contrast, sales of local service rose only $49 million to $1.18 billion, and sales of access services that allow long-distance companies to complete toll calls using part of Bell Atlantic's network rose $39 million to $917.1 million.

Bell Atlantic is awaiting regulatory approval to complete its acquisition of Nynex Corp., the New York-based local phone company with which it already jointly owns Bell Atlantic Nynex Mobile. Bell Atlantic said it expects a ruling from the Department of Justice in the next few days, analysts said.

Pub Date: 4/18/97

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