Cellular phone business helped boost Bell Atlantic's profit 12% in 4th quarter

Companies also ordering more lines for data and Internet services

January 25, 2000|By BLOOMBERG NEWS

NEW YORK -- Bell Atlantic Corp., the No. 2 U.S. local-telephone company, said yesterday that fourth-quarter profit rose 12 percent as it signed up wireless customers during the holidays, and businesses increased purchases of fast data-transmission services.

Profit from operations rose to $1.22 billion, or 77 cents a share, from $1.09 billion, or 69 cents, a year earlier. Sales climbed 6.6 percent to $8.61 billion from $8.08 billion, the fastest growth rate of the year.

New York-based Bell Atlantic, which serves Maryland and has agreed to buy Irving, Texas-based GTE Corp. for $86.6 billion, is benefiting from consumer demand for cellular phones and from businesses ordering more lines for data and Internet services. Data services accounted for almost 80 percent of revenue growth at Bell Atlantic's main U.S. phone operations.

"Data revenue was once again a big contributor to growth," Fred Salerno, chief financial officer, said in a conference call. "We continue to see a significant shift in revenue profile toward wireless and data."

Bell Atlantic said revenue from its local phone business rose 3.5 percent in the quarter, while volume, or minutes of use on its network, climbed 4.2 percent. Revenue from data services jumped 26 percent to almost $800 million. For the full year, revenue from consumer caller-identification services increased 27 percent, while the number of customers rose to 7.5 million.

Bell Atlantic shares rose 6.25 cents yesterday to $60.125. Bell Atlantic said it will file a plan with the Federal Communications Commission tomorrow related to its purchase of GTE. Bell Atlantic's plan calls for putting some Internet assets into a separate company and selling 90 percent of that company to the public.

That could help Bell Atlantic get around restrictions that would bar the combined company from sending voice and data over long distances.

Bell Atlantic Mobile added 954,000 wireless customers in the quarter, excluding those from its purchase of Frontier Cellular properties. The company had 12 million customers at year-end, up 39 percent from a year earlier. Revenue rose 28 percent in the quarter to $1.6 billion.

In the fourth quarter, Bell Atlantic said it took a charge of $67 million, or 4 cents a share, for costs related to its merger with Nynex Corp.

It also took a charge of $432 million, or 27 cents, for an accounting adjustment related to its ownership of $3.2 billion in notes that are exchangeable into shares of Cable & Wireless Communications PLC. The charges resulted in net income of $719 million, or 45 cents a share.

In the 1998 fourth quarter, Bell Atlantic took a charge of $56 million, or 4 cents a share, for costs from the Nynex merger, resulting in net income of $1.03 billion, or 65 cents a share.

Fourth-quarter 1999 results matched the average estimate of 77 cents a share, based on a survey of 20 analysts by First Call/Thomson Financial.

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