Bell Atlantic Announces Double-Digit Earnings Growth For Second Quarter 1999

Full Transparency

Our editorial transparency tool uses blockchain technology to permanently log all changes made to official releases after publication.

More of our content is being permanently logged via blockchain technology starting [10.23.2020].

Learn more

NEW YORK -- Strong growth in data and wireless services and sustained demand for basic telecommunications combined to increase Bell Atlantic's (NYSE: BEL) adjusted second-quarter earnings per diluted share (EPS) to 75 cents, up 10.3 percent from 68 cents in second quarter 1998. Second-quarter net income available to common shareowners increased 11 percent to $1.2 billion from second quarter 1998 net income of $1.1 billion.

For the first half of 1999, adjusted EPS rose to $1.48, an increase of 10.4 percent over $1.34 in the first half of 1998. Adjusted net income available to common shareholders rose to $2.3 billion, 10.7 percent higher than $2.1 billion in the first half of 1998.

Consolidated second-quarter revenues grew 4.6 percent compared to the year-ago quarter, to $8.3 billion. Absent a one-time rebate in Massachusetts, consolidated revenue growth would have been 4.9 percent. Proportionate revenues, which include the company's share of revenues from its unconsolidated wireless investments, rose 6.3 percent for the quarter. Consolidated and proportionate first-half revenues rose 4.4 and 6.2 percent respectively.

Adjustments and reported results are described below.

"After the first half of 1999, we are exactly where we expected to be -- on plan and ahead of the curve, proving our ability to compete in the industry's most attractive markets," said Bell Atlantic Chairman and CEO Ivan Seidenberg.

"Our results reflect the accelerating transformation of our revenue growth profile, with increasing contributions from data and wireless services, as well as our industry-leading success in controlling costs and improving productivity. We are speeding up our drive into the high- growth markets of the future at the same time we continue to experience solid demand for basic services.

"We are making solid progress in deploying a wide range of high- speed data services for all of our customers. Our Digital Subscriber Line rollout continues, and Infospeed DSL is now available to the general business market as well as to consumers. And during the quarter, we launched virtual private network, call center and other enterprise services and further strengthened our abilities to deliver end-to-end managed data solutions to large businesses.

"Once again, our Global Wireless Group delivered world-class results in extraordinarily competitive markets, contributing substantially to our revenue and earnings growth. Global Wireless is one of the world's premier portfolios, with national and global scope, and industry-leading customer care and network reliability.

"We also entered the final phases of New York State's review of our long distance application and made a great deal of headway in proceedings in Massachusetts, Pennsylvania and New Jersey. We're eager to move these discussions to Washington, get approvals and start combining long distance service with all the other services and innovations we now deliver to our customers.

"During the quarter, our proposed merger with GTE also picked up momentum as we completed our shareowner votes, the Department of Justice's review and numerous state proceedings. We're confident we will pass muster at the Federal Communications Commission and the remaining states -- on both long distance and the merger -- and form one of the top-tier communications companies for the next century."

Quarterly EPS figures have been adjusted by one cent per share in second quarter 1999 for charges related to Bell Atlantic-NYNEX merger integration, and by three cents per share in second quarter 1998 for charges related to merger integration and an enhanced pension offer. Reported EPS of 74 cents increased 13.8 percent over 65 cents per share in second quarter 1998. Reported net income available to common shareowners for the quarter was $1.2 billion, 14.3 percent higher than second quarter 1998 reported net income of $1.0 billion.

Six-month reported EPS figures have been adjusted for special items totaling two cents per share in 1999 and 13 cents per share in 1998. Reported six-month 1999 EPS of $1.46 grew 20.7 percent compared to $1.21 in first-half 1998. Reported net income available to common shareowners of $2.3 billion rose 20.8 percent over $1.9 billion in the prior- year period.

Highlights of the Domestic Telecom and Global Wireless segments, and related adjusted and proportionate information, are discussed below.


Domestic Telecom Highlights

Domestic Telecom revenues increased 2.8 percent over second quarter 1998, with the growth rate reduced by accounting for a one-time rebate to Massachusetts customers following a favorable regulatory decision on reciprocal compensation. Excluding the rebate, which is approximately $21 million, Telecom revenues grew 3.2 percent. More than three- quarters of Telecom revenue growth came from sales of data services, with digital data revenues for the quarter, including those from high-bandwidth, packet-switched and special access services and Bell Atlantic's network integration business, increasing 26.3 percent over second quarter 1998 to $691 million.

Growth in volumes for basic services reflected Bell Atlantic's aggressive marketing activities. The number of access lines in service increased 3.8 percent to 42.4 million, and the number of voice-grade equivalents (access lines plus data circuits) rose 12.9 percent in the quarter to 60.6 million. Business VGEs grew 21.7 percent to 34 million. Access minutes of use rose 4.6 percent.

The demand for digital connectivity and data services continued to grow in all markets. In the enterprise and general business markets:


  • Data circuits, or "DSO equivalents" in service (digital, high-bandwidth and packet-switched services as measured in 64-kilobit voice-grade equivalents) increased 41 percent over second quarter 1998.


  • Bell Atlantic's Data Solutions Group (DSG) increased revenues 31.1 percent over the prior-year period and continued to expand its portfolio of services to meet the full range of enterprise customers' needs. During the quarter, DSG introduced Virtual Private Network Services and agreed to acquire Customer Management Automation, a leading provider of integrated call center solutions. DSG also expanded its Internet access services to offer high-speed connections through frame relay, private line or Asynchronous Transfer Mode (ATM).


  • Bell Atlantic has introduced Infospeed DSL PLUS to small businesses for always-on, high-speed Internet access at affordable prices for as low as $64.95 a month. Small businesses can choose one of three DSL speeds packaged with Internet access.


  • Bell Atlantic ended the quarter with 560,000 basic rate Integrated Services Digital Network (ISDN) lines in service, up 14.1 percent from second quarter 1998, and the number of primary rate ISDN channels in service increased 51.1 percent to approximately 982,000.


In the consumer market:


  • Bell Atlantic expanded availability of Infospeed DSL service to consumers in the New York and Boston metropolitan areas. The service is also available in the Washington, D.C., Pittsburgh and Philadelphia metropolitan areas and parts of northern and southern New Jersey. In addition, the number of additional lines, many of which are used for Internet access and home fax machines, grew 16 percent over second quarter 1998.


  • By the end of the quarter, Bell Atlantic had signed agreements with more than 40 Internet Service Providers (ISPs), including America Online, Prodigy, Splitrock and Flashcom, to enable their customers to access the Internet using Bell Atlantic's Infospeed DSL service.


  • New combinations and price plans helped increase sales of packages of vertical services by approximately 60 percent, with the number of packages in service increasing to more than 1.6 million. Caller ID revenues for the quarter increased 23.9 percent compared to second quarter 1998, as the number of subscribers increased to 7.2 million, with penetration exceeding 27 percent. Home Voice Mail revenues rose 8.7 percent.


  • Use of Bell Atlantic's National 411 service grew rapidly in the second quarter, with the number of callers asking for national listings approaching one million a week.


In the network services market:


  • Special access revenues for the period rose 23.6 percent to $456 million.


  • By the end of the second quarter, Bell Atlantic was providing approximately 1.1 million access lines on a wholesale basis to other local exchange providers. Bell Atlantic also signed agreements with two wholesalers for two of the largest resale orders yet placed, which will total 425,000 lines over the next five years.


Adjusted quarterly operating expenses for Domestic Telecom of $4.9 billion were nearly flat compared to second quarter 1998, with cash expenses decreasing by 1.6 percent despite higher payments to competitive local exchange carriers (CLECs) and continued investment in long distance and data capabilities.


Global Wireless Highlights

Strong domestic and international performance produced further gains in Bell Atlantic's Global Wireless Group's results. Proportionate subscribers increased 36.2 percent over second quarter 1998 to 9.9 million, as proportionate net customer additions in the quarter totaled 570,000. The international portfolio contributed more than half of the Group's year-over- year subscriber growth.

Total proportionate revenues for the group increased 28.3 percent to $1.4 billion. Proportionate operating income reached $256 million, with proportionate operating cash flow increasing 23.1 percent in the quarter to $469 million.

Global Wireless added a total of 271,000 domestic subscribers in the quarter, with Bell Atlantic Mobile (BAM) adding 214,000 new net subscribers. BAM ended the quarter with 6.6 million customers, up 15.8 percent.

Domestic highlights:

  • BAM total revenue exceeded $1.0 billion in the quarter, an increase of 18.1 percent over second quarter 1998. Total revenue per subscriber increased to $53, up 1.6 percent.


  • Digital subscribers now comprise 27 percent of BAM's customer base and account for nearly 60 percent of busy-hour usage on the company's network. In May, the company announced plans to keep pace with its rapid growth by expanding its extensive customer service operation with a new call center in South Carolina.


  • To capture the explosive market opportunity presented by the Internet, BAM introduced new flat-rate pricing of $39.95 per month for wireless Internet access. BAM also became the first wireless provider to offer accessories to online shoppers nationwide, whether or not they are BAM subscribers.


  • PrimeCo Personal Communications passed the three percent mark in penetration of covered POPs during the quarter. Total PrimeCo subscribers now exceed 1.2 million, more than double second quarter 1998 levels. PrimeCo also recently launched service in the Florida Keys and Corpus Christi, Texas, with additional market launches scheduled for the remainder of 1999.


  • Total PrimeCo revenues for the quarter grew nearly 78 percent over second quarter 1998 to $213 million. Average monthly revenue per subscriber in the quarter was $53, and operating cash flow for the quarter improved 85 percent over second quarter 1998.


Bell Atlantic's international wireless portfolio ended the quarter with 2.8 million proportionate subscribers, more than double the number in second quarter 1998. Proportionate net subscriber additions at the international investments totaled 299,000 for the quarter, 35.9 percent higher than net additions in the prior-year period.

International proportionate revenues for the quarter rose 61.5 percent to $302 million. Operating income from international investments increased 125 percent over second quarter 1998 to $72 million, with proportionate operating cash flow growing 89.5 percent to $108 million.

International highlights:

  • Omnitel Pronto Italia, Europe's second largest wireless provider, added more than 900,000 subscribers in the second quarter, pushing its subscriber base to more than 7.8 million. In June, Omnitel received a national fixed-line license that it will use to meet the needs of corporate customers. The company also introduced Omnitel 2000, the world's first wireless Web portal that gives any wireless, wireline, or Web user the option of using a voice recognition platform for navigation. In June, Bell Atlantic increased its ownership of Omnitel to 23.1 percent.


  • The number of Grupo Iusacell subscribers in Mexico grew to 951,000, 73 percent higher than in the prior-year period. The company also more than doubled long distance revenues over the same period last year and introduced Calling Party Pays in May. Iusacell's digital customer base grew 106 percent this quarter, and three of its four regions have now converted nearly all of their networks to offer digital services.


  • STET Hellas added almost 131,000 net customers in the quarter, and ended the period with more than 928,000 subscribers. STET Hellas was recently honored with a Teleperformance Gold Award for excellence in customer care, and now offers subscribers the ability to pay phone bills and recharge prepaid cards through the Bank of Greece's hundreds of automatic teller machines.


* * *

Bell Atlantic is at the forefront of the new communications and information industry. With more than 43 million telephone access lines and nearly 10 million wireless customers worldwide, Bell Atlantic companies are premier providers of advanced wireline voice and data services, market leaders in wireless services and the world's largest publishers of directory information. Bell Atlantic companies are also among the world's largest investors in high-growth global communications markets, with operations and investments in 23 countries.

For further information on quarterly results, visit Bell Atlantic's Newsroom or Investor Information Websites ( and, or use Bell Atlantic's Fax on Demand service at 800-329-7310.

NOTE: This press release contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Discussion of factors that may affect future results is contained in our recent filings with the Securities and Exchange Commission.

Related Articles

Verizon's second-quarter results continue to demonstrate our ability to deliver strong customer growth.
NEW YORK – Verizon Communications Inc. (NYSE, Nasdaq: VZ) delivered continued customer growth in the recently concluded quarter, according to comments