Printer Friendly

ROCHESTER TEL FIRST QUARTER EARNINGS UP 17.8 PERCENT; LONG DISTANCE RESULTS DRIVE PERFORMANCE

 ROCHESTER, N.Y., April 21 /PRNewswire/ -- Rochester Tel (NYSE: RTC) today reported consolidated net income of $18.0 million for the first quarter of 1993, a 17.8 percent increase over the first quarter of 1992. Earnings per common share were $.53, a 17.8 percent improvement over earnings per share of $.45 in last year's first quarter.
 "Led by outstanding performance at RCI Long Distance, our overall results for the first quarter of 1993 were excellent," stated Ron Bittner, president and chief executive officer. "We have continued the momentum established last year, which in my view is a demonstration of Rochester Tel's fundamental earnings strength."
 Total revenues were $211.0 million for the quarter, a 9.0 percent improvement over the first quarter of 1992. Consolidated operating income rose 9.8 percent, reaching $44.4 million for the quarter.
 TELECOMMUNICATION SERVICES
 At the Telecommunication Services group, revenues grew 19.0 percent and operating income improved 46.5 percent over the comparable period of 1992. As mentioned, driving these results was the long distance segment, with a 23.6 percent increase in revenues and a 73.9 percent increase in operating income.
 Retail revenues increased at both RCI and Long Distance North, including a new casual calling program that generated almost $1.2 million in revenue in the first quarter alone. Also reflected was the positive impact of several contracts, including the New York State Department of Corrections and Budget Call Long Distance, a long distance reseller in Pennsylvania for which RCI had been providing network services. During the first quarter, Rochester Tel also signed a definitive agreement to acquire Budget Call Long Distance.
 In the company's wireless segment, revenues increased 18.5 percent, a result of higher access and usage revenues at Rochester Tel Mobile Communications. Operating income declined modestly, a result of higher operating expenses associated with network operations and maintenance, as well as higher cost of goods sold relating to significant growth in the customer base. Total customers increased 37 percent over the first quarter of last year. The operating margin in this segment was 8.0 percent for the quarter and is expected to improve through the year.
 TELEPHONE OPERATIONS
 In Telephone Operations, revenues and operating income improved 5.0 and 5.5 percent, respectively, over the first quarter of last year. The quarter-to-quarter results in Telephone Operations are comparable, since prior year results have been restated for acquisitions accounted for as poolings of interests in late 1992.
 The Regional Telephone companies led the company's performance in the local exchange business. The group reported revenue growth of 7.0 percent and a 16.6 percent improvement in operating income over the comparable period in 1992. The primary factors relating to the improvement were higher toll revenues and expense controls relating to operational synergies and staff realignments. Total costs and expenses for the Regional Telephone companies increased by only 3.3 percent during the quarter over the first quarter of 1992.
 At the Rochester operating company, revenues grew nearly 4.0 percent while operating income declined by 5.1 percent, a result of higher marketing expenses, wages and benefits. A portion of the increased expense was driven by severance benefits associated with organizational changes designed to streamline the business unit and better align the company's workforce with the needs of its customers.
 EARNINGS FACTORS
 The company's results for the quarter include the impact of the adoption, on January 1, 1993, of a new accounting method required for postretirement benefits other than pensions. This new standard requires that the projected future costs of providing benefits such as health care and life insurance be recognized as an expense as employees render service, instead of when the benefits are paid.
 The company's unrecognized accrued postretirement obligation at the beginning of this year was approximately $125 million. Rochester Tel has elected to amortize this cost over a period of 20 years. The adoption of this new standard resulted in approximately $3.1 million in additional operating expenses in the first quarter. However, a substantial portion of the increase was offset by a change in accounting, subject to approval by the New York State Public Service Commission, for pension costs at the Rochester operating company. The net impact of both accounting changes resulted in additional operating expenses of $1.2 million for the quarter.
 Rochester Tel's net income was also impacted by a $1 million pre-tax ($.6 million post-tax) gain from the sale of a minority interest in a cellular property in Illinois.
 The company's earnings were announced today at the annual meeting of shareowners, which was held in Bloomington, Minn. At the meeting, 14 directors were elected and the accounting firm of Price Waterhouse was approved as the company's independent auditors for the 1993 fiscal year.
 Rochester Tel has operations that serve over a million customers through 50 telecommunications companies in 23 states. The company's principal lines of business include long distance, network systems, wireless and telephone operations. Headquartered in Rochester, N.Y., Rochester Tel was incorporated in 1921.
 ROCHESTER TELEPHONE CORPORATION
 Consolidated Statement of Income
 (Unaudited)
 3 Months Ended March 31
 In thousands, except per share data 1993(A) 1992
 Revenue and Sales
 Telephone Operations $144,574 $137,708
 Telecommunication Services 66,395 55,802
 Total Revenues and Sales 210,969 193,510
 Costs and Expenses
 Operating expenses 121,638 109,441
 Cost of goods sold 5,028 4,688
 Depreciation 28,928 27,649
 Taxes other than income taxes 11,011 11,320
 Total Costs and Expenses 166,605 153,098
 Operating Income 44,364 40,412
 Interest expense 11,810 12,758
 Other income and expense:
 Allowance for funds used during
 construction 370 366
 Other income (expense), net (3,625) (3,042)
 Income Before Taxes 29,299 24,978
 Income Taxes 11,281 9,687
 Consolidated Net Income 18,018 15,291
 Dividends on preferred stock 297 297
 Income Applicable to Common Stock $17,721 $14,994
 Dividends on common stock $13,166 $12,726
 Average common shares outstanding(B) 33,332 33,320
 Earnings Per Common Share
 Primary $.53 $.45
 Fully Diluted $.53 $.45
 (A) -- On Jan. 1, 1993, the company adopted Financial Accounting Standards Board Statement No. 106 (FAS 106), "Employers' Accounting for Postretirement Benefits Other than Pensions," using the delayed recognition of the transition obligation method. The incremental expense included in operating income was $3.1 million. However, a substantial portion of the increase was offset by a change in accounting, subject to approval by the New York State Public Service Commission, for pension costs at the Rochester operating company.
 (B) -- As a result of conversions of 4-3/4 percent convertible debentures, 6,857 shares of common stock were issued during the three month period ended March 31, 1993.
 ROCHESTER TELEPHONE CORPORATION
 Business Segment Information
 (Unaudited)
 3 Months Ended March 31
 In thousands of dollars 1993 1992
 TELEPHONE OPERATIONS
 Revenues
 Local service $55,520 $51,682
 Network access service 53,539 48,182
 Long distance network service 6,520 5,792
 Miscellaneous 29,968 32,611
 Less: Uncollectibles 973 559
 Total Revenues $144,574 $137,708
 Operating Income(A) $ 38,137 $ 36,161
 Depreciation $ 25,078 $ 24,323
 Identifiable Assets(B) $1,418,632 $1,393,249
 TELECOMMUNICATIONS SERVICES
 Sales
 Network Services & Systems:
 Non-Affiliate $60,917 $51,219
 Affiliate 787 100
 Wireless Communications 5,421 4,575
 Eliminations (730) (92)
 Total Sales $66,395 $55,802
 Operating Income
 Network Services & Systems $5,775 $3,719
 Wireless Communications 433 513
 Eliminations 19 19
 Total Operating Income(A) $6,227 $4,251
 Depreciation $3,850 $3,326
 Identifiable Assets(B) $195,131 $199,513
 (A) -- See Note A on Consolidated Statement of Income.
 (B) -- Includes assets eliminated in consolidation of $113,190 in 1993 and $99,219 in 1992.
 -0- 4/21/93
 /CONTACT: Philip H. Yawman of Rochester Tel, 716-777-6179/
 (RTC)


CO: Rochester Telephone Corporation ST: New York IN: TLS SU: ERN

BM -- CL008 -- 8655 04/21/93 11:02 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 21, 1993
Words:1325
Previous Article:REVCO PRESIDENT CITES FAVORABLE TRENDS, EXPECTS STRONG FOURTH QUARTER
Next Article:WORTHINGTON FOODS INTRODUCES GRILLERS(R) IN BURGER KING TEST MARKET
Topics:


Related Articles
ROCHESTER TEL REPORTS 1991 EARNINGS
ROCHESTER TEL REPORTS SECOND QUARTER EARNINGS NET INCOME FROM OPERATIONS IS UP 25.1 PERCENT
ROCHESTER TEL THIRD QUARTER NET INCOME CONTINUES POSITIVE TREND; OPERATING INCOME IS UP 18.0 PERCENT OVER 1991
ROCHESTER TEL REPORTS THIRD QUARTER EARNINGS; LONG DISTANCE REVENUES JUMP BY 48 PERCENT
ROCHESTER TEL 1993 OPERATING INCOME HIGHEST IN HISTORY
ROCHESTER TEL FIRST QUARTER EARNINGS UP 24.3 PERCENT
NET INCOME INCREASES 24 PERCENT AT FRONTIER CORP.; COMPANY REPORTS 12TH CONSECUTIVE QUARTER OF DOUBLE DIGIT EPS GROWTH
FRONTIER CORPORATION REPORTS OVER 17 PERCENT GROWTH IN EARNINGS PER SHARE FROM OPERATIONS
DRIVEN BY STRONG FOURTH QUARTER RESULTS, FRONTIER CORPORATION REVENUES TOP $2.1 BILLION IN 1995
FRONTIER CORPORATION REPORTS 26 PERCENT GROWTH IN EPS FROM OPERATIONS; RECORD FIRST QUARTER REVENUE UP 43 PERCENT TO $655 MILLION

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters