Buoyed by growth from sales in Europe of high-speed phones and other data service products, Ameritech Corp. reported a 12 percent increase in operating profits for its fourth quarter.
Meeting Wall Street analysts’ expectations, the Chicago-based Baby Bell said fourth-quarter net income rose to $684 million, or 61 cents a share, before one-time items. That compares to income of $610 million, or 55 cents a share in the year-ago quarter.
Including the one-time charges and gains for the fourth quarter, net income rose 25 percent, to $762 million. Revenues for the period rose 7 percent, to $4.4 billion.
Ameritech’s European portfolio contributed roughly one-fourth of the company’s earnings growth rate for the fourth quarter, said Oren Shaffer, Ameritech executive vice president and chief financial officer. “The idea was to get international investments to a scale that they would have a meaningful impact on our results,” Shaffer said.
Ameritech said it expects its merger with SBC Communications Inc. to be completed in mid-1999, followed by an acceleration of overall earnings growth to the higher double digits for the combined company, Shaffer said. “If we took this last quarter and added (Ameritech and SBC earnings) together, the growth rates would have been just over 16 percent,” Shaffer said.
SBC, which is a larger company, also announced earnings Thursday, saying quarterly profits rose 18 percent.
For the year, Ameritech’s operating income, which excludes one-time items, grew 11 percent, to $2.61 billion, or $2.35 a share, from $2.35 billion, or $2.12 a share, a year earlier.
Including one-time items, net income rose 57 percent, to $3.6 billion, or $3.25 a share, for the year. Annual revenue rose 7 percent, to $17.15 billion.
AMERITECH CORP.
In millions except for per-share data
4th Qtr. Dec. 31 1998 1997
Revenues 4,442 4,147
Extraordinary gain a102 b52
Extraordinary loss c24 d52
Net income (loss) 762 610
Per share 0.68 0.55
Year 1998 1997
Revenues 17,154 15,998
Extraordinary gain e1,114 f89
Extraordinary loss g122 h139
Net income (loss) 3,606 2,296
Per share 3.25 2.08
%%
a–After-tax gain on sale of 19 local phone exchanges in Wisconsin
to Century Telephone Enterprises Inc.
b–After-tax gains of $25 million from sale of 14.3 percent interest in
Bell Communications Research and $27 million from sale of stake in MATAV
of Hungary.
c–After-tax charge related to early redemption of long-term debt.
d–After-tax charges of $10 million for currency related adjustment to
investment in Tele Danmark and $42 million to settle litigation.
e–After-tax gains of $1.01 billion from sale of shares in Telecom Corp.
of New Zealand, and $102 million from sale of Wisconsin assets.
f–After-tax gains of $37 million from sale of 12.5 percent interest in
Sky Network Television of New Zealand, plus Bell Communications and MATAV
sales.
g–After-tax charges of $34 million from currency accounting adjustment;
$24 million from early debt redemption, and $64 million for
restructuring.
h–After-tax charges of $87 million from restructuring at Belgacom; $42
million litigation settlement, and $10 million from Tele Danmark currency
-related adjustment. %%
