NYNEX continues double-digit earnings growth - net income up 13.6%
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NEW YORK -- NYNEX Corporation today announced a 13.6 percent increase in third quarter 1995 net income to $366.8 million, or $0.86 per share, from third quarter 1994 net income of $323.0 million, or $0.77 per share. These figures exclude non-recurring items in both quarters.
Non-recurring items for the third quarter of 1995, totaling $23.9 million after taxes, or $0.06 per share, consist of charges for the corporations enhanced pension offer, net gains associated with the NYNEX-Bell Atlantic cellular partnership, and other non-recurring charges. Third quarter 1994 figures exclude after-tax charges for the enhanced pension offer of $20.5 million, or $0.05 per share.
In addition, as of this quarter NYNEXs participation in the NYNEX-Bell Atlantic cellular partnership is reported on an equity basis rather than a consolidated basis. Consolidated results for 1994 and 1995 discussed below have been adjusted to permit comparison.
Consolidated revenues for the third quarter, excluding non-recurring items, were up 4.9 percent to $3.3 billion, reflecting robust volume growth and aggressive marketing. Telecommunications revenues were up 4.3 percent to $3.0 billion, and total revenues from other business units increased 11.4 percent.
Consolidated operating expenses of $2.6 billion, excluding non-recurring items, rose 2.1 percent over the third quarter of 1994. Telecommunications expenses were up 1.0 percent, and total expenses in other business units grew 13.1 percent. Operating margin expanded 2.2 percentage points over the third quarter of 1994 to 21.4 percent, reflecting the fact that revenue growth outpaced growth in expenses.
Im delighted with our delivery of double-digit earnings growth, both for the quarter and the year to date, said NYNEX Chairman and Chief Executive Officer Ivan Seidenberg.
Not only are Telecommunications revenue growth and productivity gains helping us expand our operating margins, they also are enabling us to fund those investments necessary to grow the business and generate further productivity gains.
Our other operations efforts to drive business volumes are also paying off, particularly at our new cellular partnership and NYNEX CableComms. We are on track to enter the wireless video market in the second half of next year. And through our new Indonesian partnership, we have entered one of the worlds most promising cellular markets. Steps like these will enable us to continue to deliver steady growth in shareholder value over the long term, he said.
Telecommunications revenue growth of 4.3 percent, to $3.0 billion, was fueled by strong demand growth, with access lines increasing by 501,000 to nearly 17 million, up 3.0 percent over the third quarter of 1994, and access usage rising 9.4 percent. Sales of value-added services such as PhoneSmart(sm), Voice Messaging and Voice Dialing rose more than 40 percent. The quarter was also the fifth in a row with increased sales of private line services, including NYNEX Enterprise Services.
Operating margin of 25.4 percent and operating cash flow margin of 45.3 percent expanded 2.8 and 1.4 percentage points respectively over the third quarter of last year. Continued productivity gains enabled the corporation both to expand margin and increase investments in marketing, customer service and process improvements. Telecommunications expenses were up 1.0 percent over the third quarter of last year.
Telecommunications operating income grew 17.0 percent over the third quarter of last year to $761.6 million, excluding non-recurring items in both quarters.
In its first quarter as a jointly managed partnership, Bell Atlantic NYNEX Mobile Communications enjoyed a 47 percent annual growth rate, acquiring nearly 229,000 new customers through innovative value-priced offerings such as TalkAlong (sm) and MobileReach(R) roaming. The partnership now has nearly 3 million customers, up close to 1 million over the past year.
Benefiting from the efficiencies resulting from the partnership, Bell Atlantic NYNEX Mobile reduced its acquisition cost to $216 per customer -- among the lowest in the industry. The partnership increased operating cash flow 78 percent over comparable figures for the third quarter of 1994 and produced operating cash flow margins of 43 percent, up 12 percentage points over the same period a year ago. The partnerships pretax income of $111.0 million grew 154.4 percent over comparable results for the third quarter of last year. NYNEXs share of the partnerships pretax income, $41.3 million, grew $37.3 million over the comparable figure for the same period a year ago.
NYNEX Information Resources Company (NIRC) increased revenues 3.7 percent over the third quarter of 1994 to $233.7 million, with operating income up 2.5 percent to $16.1 million, excluding the effects of the enhanced pension offer. In October, NIRC expanded its on-line directory, the NYNEX Interactive Yellow Pages, to include more than 16.5 million listings of virtually every business in the United States. The number of people using the NYNEX Interactive Yellow Pages each day has increased 33 percent since the service was introduced in May.
NYNEX CableComms, the corporations United Kingdom cable television and telecommunications subsidiary, passed nearly 200,000 homes in the quarter, bringing the total homes passed to more than 1 million of the 2.7 million homes in its franchise areas. The number of cable television customers grew 71 percent from the third quarter of 1994 to almost 165,000. The number of residence telecommunications lines increased more than two and a half times to nearly 190,000, and business telecommunications lines increased 160 percent.
TELE-TV, the nationwide video alliance of NYNEX, Bell Atlantic and Pacific Telesis, selected Thomson Consumer Electronics to provide the alliance with up to 3 million digital set-top box devices for wireless television services. NYNEX plans to begin offering wireless TV services in the second half of 1996.
TelecomAsia, NYNEXs strategic alliance to build a two-million-line network in Bangkok, Thailand, brought the total number of lines installed to 1.3 million, fulfilling two-thirds of TelecomAsias original commitment. TelecomAsia also received government approval to build an additional 600,000 lines, which will require no further investment on the part of NYNEX.
NYNEX is a global communications and media company that provides a full range of services in the northeastern United States and high-growth markets around the world, including the United Kingdom, Thailand, Gibraltar, Greece, Indonesia, the Philippines, Poland, Slovakia and the Czech Republic.
The Corporation is a leader in the telecommunications, wireless communications, cable television, directory publishing and entertainment and information services.