GTE REPORTS THIRD-QUARTER EARNINGS; EXCLUDING EXTRAORDINARY CHARGE, EARNINGS PER SHARE WERE UP 13 PERCENT.
/REPEATING WITH DIFFERENT CONTACT/ STAMFORD, Conn., Oct. 19 /PRNewswire/ -- GTE Corporation (NYSE: GTE)
today reported that consolidated net income for the third quarter of 1993 was $468 million, or 49 cents per share, compared with $465 million, or 52 cents per share, in the third quarter last year. The results for the 1993 quarter include a previously announced after-tax extraordinary charge of $90 million, or 10 cents per share, resulting from the early retirement of high-coupon debt. Excluding the impact of this extraordinary charge, earnings per share for the quarter were 59 cents, an increase of 13 percent.
"We are very pleased with these results, which reflect solid volume growth in both our telephone and cellular operations despite continued weakness in the economy, especially in California," said GTE Chairman and Chief Executive Officer Charles R. Lee. "Telecommunications Products and Services announced record-high operating results for the quarter, while Telephone Operations continued to report excellent results. Both groups benefited from continuing cost-control programs," Lee said. "GTE's cellular business added over 110,000 customers from July through September bringing total subscribers to 1,365,000," the chairman noted. Consolidated revenues and sales totaled $4.94 billion in the quarter, compared with $4.97 billion in the year-ago quarter. Although volume growth in Telephone Operations and cellular was strong, the slight decline in consolidated revenues reflects competitive price reductions made by Telephone Operations to domestic long-distance companies as well as lower government-communications sales. Operating income in the third quarter increased 6 percent to $1.16 billion, compared with $1.09 billion for the same period last year. Net interest expense declined 14 percent from the third quarter last year reflecting reduced debt levels and lower interest rates. The recently announced refinancing of $2.1 billion of high-coupon debt will further reduce interest costs in the future. Nine-Month Results For the first nine months of 1993, income before the extraordinary charge was $1.46 billion, or $1.53 per share, compared with $1.27 billion, or $1.40 per share last year. Excluding the impact of the $46 million, or 5 cents per share, after-tax charge for Telephone Operations' voluntary separation programs recorded earlier this year, income before the extraordinary charge for the first nine months of 1993 would have been $1.50 billion, or $1.58 per share, a 13 percent increase over 1992. Operating income rose 5 percent to $3.30 billion. Consolidated revenues and sales were $14.69 billion for the first nine months of 1993, compared with $14.85 billion last year.
Telephone Operations' Minutes of Use Up 7.7 Percent and Access Lines
Up 3.9 Percent Revenues from Telephone Operations declined slightly from the year- ago quarter to $3.97 billion. Increases in unit volumes in both domestic and international operations were offset by more competitive interstate access tariffs charged to long-distance companies. Minutes of use of GTE's domestic local-exchange network for long-distance calling grew at an annual rate of 7.7 percent, while total access lines increased 3.9 percent over last year. This strong volume growth was achieved despite continued weakness in the economy, particularly in California. Operating margins improved slightly from last year as cost-control and reduction programs in domestic operations more than offset the slight revenue decline. GTE is the largest U.S.-based local telephone company with domestic and international operations serving 22.1 million access lines in 40 states, Canada and Latin America. Operating Income More Than Doubles at Telecommunications Products and Services Revenues and sales from Telecommunications Products and Services declined slightly from the year-ago quarter to $972 million. Lower government-communications sales, resulting from the wind-down of the MSE contract, more than offset higher revenues from the continued strong growth in mobile-cellular operations. Operating income, however, more than doubled, rising to $114 million, compared with $55 million in the third quarter last year. Higher revenues and efficiencies in mobile cellular as well as cost reductions in the government systems business contributed to this sharp increase. Operating income also benefited from improved results in the information services businesses.
Cellular Service Revenues Increase 27 Percent; 111,000 Customers Added
Cellular service revenues were $279 million, 27 percent over the same period last year as customer growth continued at a high level. GTE added 111,000 new customers in the third quarter, bringing total customers served to 1,365,000 -- a gain of 40 percent over the year-ago quarter. During the quarter, service revenues per subscriber averaged $71 per month, compared with $73 per month reported in the preceding quarter and the average of $77 per month in the third quarter last year. The current average reflects the growth of casual users in the subscriber base. GTE is the second-largest cellular-service provider in the United States -- serving a population of some 53 million "POPs." GTE's Telecommunications Products and Services group comprises mobile cellular, government systems, information services which include Yellow-Pages directory advertising, and satellite and aircraft-passenger communication services. GTE is the fourth-largest publicly held telecommunications company in the world. GTE CORPORATION AND SUBSIDIARIES Condensed Summary Of Consolidated Results(A) (In Millions) Nine Months Ended Third Quarter Sept. 30, 1993 1992 1993 1992 REVENUES AND SALES Telephone Operations $3,971 $3,985 $11,807 $11,813 Telecommunications Products and Services 972 980 2,878 3,038 Total revenues and sales $4,943 $4,965 $14,685 $14,851 OPERATING INCOME Telephone Operations(B) $1,042 $1,038 $ 3,034 $ 2,996 Telecommunications Products and Services 114 55 261 141 Operating income 1,156 1,093 3,295 3,137 OTHER DEDUCTIONS Interest expense - net 290 336 915 1,029 Other - net (1) 56 89 127 Income before income taxes 867 701 2,291 1,981 Income tax provision(C) 309 236 835 711 INCOME BEFORE EXTRAORDINARY CHARGE AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES 558 465 1,456 1,270 Extraordinary charge(D) (90) -- (90) -- Cumulative effect of accounting changes -- -- -- (2,441) NET INCOME (LOSS) 468 465 1,366 (1,171) Preferred stock dividends 4 6 13 21 NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $464 $459 $1,353 $(1,192) EARNINGS (LOSS) PER COMMON SHARE Before extraordinary charge and cumulative effect of accounting changes $.59 $.52 $1.53 $1.40 Extraordinary charge(D) (.10) -- (.10) -- Cumulative effect of accounting changes -- -- -- (2.70) Consolidated $.49 $.52 $1.43 $(1.30) AVERAGE COMMON SHARES 945 898 943 894 GTE CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED SUMMARY OF CONSOLIDATED RESULTS (A) -- During the fourth quarter of 1992, GTE adopted the new accounting rules for post-retirement health care and life insurance benefits (FAS 106) and income taxes (FAS 109) retroactive to Jan. 1, 1992. These accounting changes resulted in a one-time, non-cash, after- tax charge of $2.44 billion, or $2.70 per share. This charge was recorded by restating first quarter 1992 results. Operating results for the first three quarters of 1992 were also restated to give effect to the adoption of FAS 106. The third quarter and nine month 1992 effects reduced net income by $35 million, or 3 cents per share, and $103 million, or 11 cents per share, respectively. (B) -- Results for the nine months ended Sept. 30, 1993, include a provision in the second quarter of 1993 of $74 million ($46 million after-tax, or 5 cents per share) associated with voluntary separation programs. (C) -- The third quarter 1993 amount includes the effects on deferred income taxes and current operations of the 1 percent increase in the corporate federal income tax rate to 35 percent, retroactive to Jan. 1, 1993. The impact of this tax rate change was not significant to GTE's results of operations. (D) -- Represents a one-time after-tax charge resulting from the early retirement of $2.1 billion of high-coupon debt. -0- 10/19/93 R /CONTACT: Julia Spicer of GTE, 202-463-5206, or after 6 p.m., 202-797-0715/ (GTE)
CO: GTE Corporation ST: Connecticut IN: TLS SU: ERN
TW -- NY028A -- 3841 10/19/93 10:15 EDT
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|Date:||Oct 19, 1993|
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