CENTEL ANNOUNCES QUARTERLY REVENUES, EARNINGS
CENTEL ANNOUNCES QUARTERLY REVENUES, EARNINGS CHICAGO, Jan. 23 /PRNewswire/ -- Centel Corporation (NYSE: CNT)
announced today that fourth quarter income from continuing operations was $25.7 million, or 30 cents per share, which includes an after-tax gain of 16 cents per share from the purchase by Lincoln Telecommunications of a 50 percent stake in Centel's Omaha, Neb., cellular system. The 1991 results compare to income from continuing operations in the 1990 fourth quarter of $10 million, or 11 cents per share.
Net income in the 1991 fourth quarter was $24.4 million, or 28 cents per share, up from $14.3 million, or 16 cents per share, a year ago. Revenues from continuing operations increased 5 percent to $298.7 million, up from $284.3 million, a year earlier. "Our telephone and cellular operations both showed revenue and operating income gains in the quarter, despite the weak economy," said John P. Frazee Jr., Centel's chairman and chief executive officer. "Growth in our cellular operation, which added a remarkable 30,000 customer lines in the quarter, was especially strong. While telephone access line growth has slowed, it still remains well ahead of the industry average." For the year, income from continuing operations was $112.4 million, or $1.31 per share, reflecting the gains from the sales of the company's Minnesota and Iowa telephone operations earlier in the year and the Lincoln transaction, compared to $47.1 million, or 54 cents per share, the previous year. 1991 net income, which also includes the gain from the sale of Centel's electric properties, was $159.8 million, or $1.87 per share, compared to $64.6 million, or 75 cents per share in 1990. Revenues in 1991 were $1.18 billion, up 3 percent from $1.15 billion in 1990. "We are weathering the sluggish economy that continues to impact our performance, particularly in telephone, and we have not seen any signs yet that the economy will improve noticeably in the near future," Frazee said. "We are encouraged by the strong and sustained growth in our cellular operation, and we believe the momentum we have seen in the past year will continue." Telephone revenues improved despite the divestiture of the Minnesota and Iowa operations earlier in the year, and lower interstate revenues caused by changes in cost separations rules and the reduction in the interstate rate of return, both mandated by the Federal Communications Commission, Frazee said. Telephone revenues increased slightly in the fourth quarter to $235.2 million from $235 million in the same period a year earlier. Operating income increased 3.5 percent to $49.4 million from $47.7 million. Total customer access lines, adjusted for the sales of the Minnesota and Iowa operations, grew 4.1 percent over the past 12 months. Long- distance calling volumes, reflecting the slower growth, increased 8 percent, which is a slower rate of growth compared to the same period a year ago. Directory revenues remain strong. Sales of custom calling features increased 26 percent in the quarter compared to a year ago and the sale of Centrex services climbed 115 percent. A record 30,000 customer lines were added in the company's cellular unit in the fourth quarter, and 74,000 for the year, a 40 percent increase over the past 12 months, to a total of 251,000 customer lines. "While the costs associated with this rapid customer growth, such as increased expenses associated with holiday promotions, affected fourth quarter earnings, the cellular unit was still able to produce positive operating income for the third consecutive quarter," Frazee said. Operating income for the cellular unit in the quarter was $69,000, a significant improvement from a loss of $4.9 million in the same quarter a year ago. Revenues increased 29 percent to $63.5 million, compared to $49.3 million a year ago. Seasonal usage patterns and the large number of new customers added at the end of the year who have yet to start using the service, caused revenue per customer to decline slightly in the fourth quarter. Cash flow margins improved slightly from the previous quarter and were up significantly compared to a year ago. CENTEL CORPORATION Consolidated Summary of Earnings (Unaudited) Quarter ended Dec. 31; 1991 1990 Revenues and Sales $298,722,000 $284,341,000 Expenses Operating Expenses $203,635,000 $196,976,000 Depreciation and Amortization $50,590,000 $50,705,000 Total Expenses $254,225,000 $247,681,000 Operating Income $44,497,000 $36,660,000 Gain on Divestiture of Cellular Property $21,475,000 -- Equity in Earnings of Investees, net $377,000 $6,025,000 Nonoperating Income, net $5,052,000 $3,667,000 Income from Continuing Operations before Interest Expense and Income Taxes $71,401,000 $46,352,000 Interest Expense $31,315,000 $33,084,000 Income Tax Provision $14,408,000 $3,302,000 Income from Continuing Operations $25,678,000 $9,966,000 Discontinued Operations Income (Loss) from Discontinued Operations ($918,000) $4,305,000 Total Discontinued Operations ($918,000) $4,305,000 Income before Extraordinary Charges $24,760,000 $14,271,000 Extraordinary Charges, net $334,000 -- Net Income $24,426,000 $14,271,000 Preferred Stock Dividends $377,000 $401,000 Earnings Available for Common Shareowners $24,049,000 $13,870,000 Weighted Average Common Shares Outstanding 84,931,000 84,308,000 Earnings Per Share Income from Continuing Operations 30 cents 11 cents Income before Extraordinary Charges 29 cents 16 cents Earnings Available for Common Shareowners 28 cents 16 cents Dividends Paid Per Share 22 cents 21 cents Construction Expenditures $79,156,000 $75,835,000 Year Ended Dec. 31; 1991 1990 Revenues and Sales $1,180,527,000 $1,149,323,000 Expenses Operating Expenses $793,211,000 $761,712,000 Depreciation and Amortization $206,066,000 $197,532,000 Total Expenses $999,277,000 $959,244,000 Operating Income $181,250,000 $190,079,000 Gain on Divestiture of Telephone Properties $92,480,000 -- Gain on Divestiture of Cellular Property $21,475,000 -- Equity in Earnings of Investees, net $6,908,000 $10,990,000 Nonoperating Income, net $8,014,000 $5,621,000 Income from Continuing Operations before Interest Expense and Income Taxes $310,127,000 $206,690,000 Interest Expense $141,588,000 $135,492,000 Income Tax Provision $56,187,000 $24,118,000 Income from Continuing Operations $112,352,000 $47,080,000 Discontinued Operations Income from Discontinued Operations $12,424,000 $17,540,000 Gain on Sale of Electric Operations $36,978,000 -- Total Discontinued Operations $49,402,000 $17,540,000 Income before Extraordinary Charges $161,754,000 $64,620,000 Extraordinary Charges, net $1,906,000 -- Net Income $159,848,000 $64,620,000 Preferred Stock Dividends $1,526,000 $1,606,000 Earnings Available for Common Shareowners $158,322,000 $63,014,000 Weighted Average Common Shares Outstanding 84,792,000 83,927,000 Common Shares Outstanding at End of Year 85,103,000 84,411,000 Earnings Per Share Income from Continuing Operations $1.31 54 cents Income before Extraordinary Charges $1.89 75 cents Earnings Available for Common Shareowners $1.87 75 cents Dividends Paid Per Share 88 cents 85 cents Construction Expenditures $262,375,000 $305,351,000 Notes to Consolidated Financial Statements (Unaudited) 1. In September 1991, the company completed the sale of its electric operations to Utilicorp United. The company received $325 million in cash, net of $26 million in liabilities assumed by Utilicorp United and realized a gain of $37 million ($.44 per share), net of related income tax expense of $8.8 million. During 1990, the company completed the sales of Centel Credit Company's telecommunications lease portfolio for total proceeds of approximately $55 million and completed the sale of 88.5 percent of its interest in Centel Federal Systems for approximately net book value. In January 1991, the company completed the sale of Centel Communication Systems for approximately net book value. In November, the company announced it will close Centel Information Systems, effective March 1992. Costs associated with the closing of Centel Information Systems were accrued in prior periods. Revenues from discontinued operations were $178.0 million and $449.4 million for the years ended Dec. 31, 1991 and 1990, and $6.0 million and $117.8 million for the quarters ended Dec. 31, 1991 and 1990, respectively. Income (Loss) from Discontinued Operations is net of applicable income tax expense (benefit) of $6.5 million and $11.0 million for the years ended Dec. 31, 1991 and 1990, and $(.7) million and $2.7 million for the quarters ended Dec. 31, 1991 and 1990, respectively. 2. In December 1991, the company formed a general partnership with Lincoln Telecommunications Company (Lincoln) to hold Centel Cellular Company's 55.2 percent interest in the Omaha Cellular Limited Partnership. Lincoln purchased 50 percent ownership in the new partnership from the company for $11.9 million in cash. In addition, Lincoln loaned the partnership $23.8 million. The proceeds from the loan were distributed to the company. Centel realized an after-tax gain of $13.9 million ($.16 per share) on the divestiture. In November 1991, the company announced it had reached a definitive agreement to sell its local telephone operations in Ohio to Century Telephone Enterprises, Inc. for $135 million, including $120 million in cash and $15 million in assumed debt. The sale is subject to state, federal and other approvals and is expected to close in the second quarter of 1992. In August 1991, the company completed the divestiture of its local telephone operations in Iowa with Rochester Telephone Corporation (Rochester) for $80 million in cash. Centel realized an after-tax gain of $18.2 million ($.21 per share) on the divestiture. In June 1991, the company completed the divestiture of its local telephone operations in Minnesota with Rochester for $36 million in cash, 2,885,000 shares (9.1 percent) of Rochester's common stock and ownership rights to Rochester's investment in various cellular franchises that serve a population of 435,000. Centel realized an after-tax gain of $45.6 million ($.54 per share) on the divestiture. -0- 1/23/92 /CONTACT: William White of Centel Corp., 312-399-2735/ (CNT) CO: Centel Corp. ST: Illinois IN: TLS SU: ERN FC -- NY075 -- 2892 01/23/92 14:34 EST
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|Date:||Jan 23, 1992|
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