GTE reports 10 percent earnings per share growth in third quarter, citing record customer line growth and strong demand for network usage.
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STAMFORD, Conn. -- GTE Corp. today announced that earnings per share increased 10 percent in the third quarter. Consolidated net income for the third quarter of 1996 was $756 million, or 78 cents per share, compared with $684 million, or 71 cents per share, in the third quarter of 1995, excluding non-recurring gains on sales of non-strategic telephone properties in the year-ago quarter of $11 million, or 1 cent per share.
"The strong third quarter performances of GTE's core wireline and wireless businesses, both domestically and internationally, reflect the underlying strength of our high-growth markets as well as our industry-leading productivity improvements," said GTE Chairman and Chief Executive Officer Charles R. Lee.
"The continued pace of our revenue growth, driven by record line growth as well as strong demand for new and enhanced services, is particularly encouraging," Lee noted. "Revenues for new and enhanced services -- ranging from voice messaging, data services and Caller ID to our recently launched long distance and Internet access offerings -- are up 40% over the same period last year.
"In long distance, we've more than doubled the customer base we had just three months ago to over 500,000 customers. We currently offer GTE Long Distance in 31 states, and we're on target for all 50 states by year end," Lee said.
"In keeping with our commitment to be the easiest company to do business with, GTE was the first large local-exchange company to deliver on the 'single bill promise' when we gave our Tampa customers the option to receive one bill for all their telecommunications needs -- local, long distance, cellular, paging and Internet access," Lee said.
"On the international front," Lee added, "I am pleased by the operational improvements being made by CANTV, our Venezuelan joint venture. These improvements, coupled with rate increases implemented this past year and a stabilizing economy, have had a positive impact on GTE's results."
Revenues and Operating Income Up 7%, and 8%, Respectively
Consolidated revenues and sales increased 7 percent to $5.34 billion in the quarter, compared to $5.00 billion in the year-ago quarter. The increase is driven by the record growth in customer lines and strong network usage, the number of cellular customers served, and new and enhanced telecommunications services.
Operating income in the third quarter increased to $1.45 billion, an 8 percent improvement over the $1.33 billion reported in the year-ago quarter. This reflects the increased revenue and favorable effects of ongoing cost-reduction programs, partially offset by higher selling and marketing costs associated with our national advertising campaign and the launch of new revenue opportunities. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) grew at a rate of 8 percent over the year-ago quarter, reaching $2.44 billion.
For the first nine months of 1996, consolidated revenues and sales increased
7 percent to $15.59 billion, while operating income increased 8 percent to $4.03 billion.
Net income, excluding the gains from the non-strategic telephone properties sold during the first quarter of 1996 and the third quarter of 1995, was $2.01 billion, or $2.06 per share, compared with $1.81 billion, or $1.87 per share, for the same period in 1995, representing a 10 percent increase.
Another Strong Quarter in Domestic Network Services with Record Access Line Growth of 7%, Minutes of Use Up 11%, and Cellular Customers Up 20%
Revenues from Domestic Network Services, which include GTE's wireline and wireless operations, increased 6 percent to $3.46 billion for the third quarter compared with $3.28 billion a year ago, fueled by strong increases in wireline unit volumes, continued growth in cellular customers and the continued expansion of new and enhanced telecommunications services.
Total domestic access lines grew at a record 7 percent over last year, with more than 50 percent of the residential growth coming from additional lines to the home, while minutes of use on GTE's domestic local-exchange network for long-distance calling grew at an annual rate of 11 percent.
Access lines per employee, a key indicator of productivity, increased to 314, a 17 percent improvement, from 268 a year ago.
As part of an effort to capture opportunities offered by emerging technologies, GTE during the quarter began a high-speed Asymmetrical Digital Subscriber Line ("ADSL") modem technology trial with Microsoft to provide faster Internet access. "Working closely with Microsoft," Lee said, "we are testing the ability of ADSL to deliver 'work from home' electronic commerce and more efficient Internet access to homes and businesses."
Domestic cellular-service revenues totaled $607 million in the third quarter, with customer growth continuing at a pace of 20 percent. GTE added 150,000 new domestic cellular customers during the quarter, bringing the total U.S. customers served to 3,393,000.
"The results of our domestic cellular marketing strategy to acquire and retain valued customers have produced anticipated improvements. Since late last year, our churn has been reduced by over 18 percent and our revenue per subscriber per month has been stable," Lee said.
Combining the domestic growth with the impressive 36 percent growth in international markets, the total number of cellular customers increased 23 percent.
GTE, with annual revenues of $20 billion in 1995, is one of the largest publicly held telecommunications companies in the world. It also is the largest U.S.-based local telephone company and a leading cellular-service provider -- with wireline and wireless operations in markets encompassing about a third of the country's population. Outside the United States, where GTE has operated for more than 40 years, the company serves over 6 million wireline and wireless customers. GTE is also a leader in government and defense communications systems and equipment, aircraft-passenger telecommunications, directories and telecommunication-based information services and systems.