Nynex Delivers Ninth Consecutive Quarter of Double-Digit Net Income Growth
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(a) Financial results discussed in this release are adjusted for the effects
of an enhanced pension offer and other gains and charges. Adjustments, and reported
vs. adjusted results, are described in financial tables below.
NYNEX Corporation (NYSE:NYN) today announced its ninth consecutive quarter
of double-digit earnings growth, as second quarter net income increased 11.1 percent
to $431.3 million, or $0.98 per share, compared to $388.1 million, or $0.89 per share,
in the second quarter of 1996.
Net income for the first six months of 1997 increased 11.3 percent to $834.4
million, compared to $749.6 million in the first six months of 1996. Earnings per
share were $1.90, up 10.5 percent over $1.72 per share in the same period last year.
Worldwide revenues (which include NYNEX's share of revenues from Bell Atlantic
NYNEX Mobile (BANM), Cable & Wireless Communications and its other unconsolidated
businesses) grew 6.6 percent. Consolidated revenues increased 2.0 percent over the
second quarter of 1996, to $3.5 billion. Revenue comparisons are affected by the
deconsolidation of NYNEX CableComms results after its merger into Cable & Wireless
Communications during the quarter.
Productivity gains for the quarter exceeded six percent and helped expand
operating margin to 23.7 percent, an increase of 1.9 percentage points over the second
quarter of 1996. Since the first quarter of 1994, NYNEX has steadily expanded its
operating margin by nearly seven percentage points. Operating income grew 10.6 percent
to $831.7 million.
"While preparing for our merger with Bell Atlantic, we delivered value,
both to customers and to shareowners," said NYNEX Chairman and Chief Executive
Officer Ivan Seidenberg.
"This was our ninth straight quarter of double-digit net income growth
in the world's most competitive communications markets. We increased telecommunications
revenues while absorbing regulatory price reductions. We improved service for the
fourth consecutive quarter, and we continued to post strong productivity gains. In
addition to driving earnings growth, our productivity and top-line growth underwrote
the cost of qualifying for long distance entry as well.
"NYNEX has lived with local competition for over a decade, and our experience
gives us advantages that enabled us to make commitments to the FCC on competition.
We're confident that our merger, and our entry into new markets, will enable us to
continue to deliver shareholder value in a post-Telecom Act world."
Other Results Of Second Quarter Operations
- Total Telecommunications revenues increased 2.3 percent over the second quarter
of 1996. Non-usage revenues sustained the momentum of the first quarter's sales "blitz,"
with revenues from new value-added services increasing 51.7 percent. Revenues from
PhoneSmart(sm) services, which include Caller ID, grew 62.3 percent and voice messaging
service revenues rose 29.5 percent. In business services, Centrex sales increased
12.5 percent and private line revenues grew for the 12th straight quarter, increasing
9.0 percent. ISDN revenues grew 86 percent over the second quarter of 1996, as the
number of ISDN lines in service rose to 146,000. Usage revenues, reflecting more
than $50 million in regulation-mandated price reductions, declined 1.0 percent, a
substantial improvement over the 3.3 percent decline experienced in the first quarter.
Access minutesof use increased 7.5 percent.
- Access line growth in the northeastern U.S. continued at an historically
high level, with the number of lines in service increasing 3.5 percent over the second
quarter of 1996 to 18.1 million.
- NYNEX's wireless partnerships sustained their rapid growth. BANM's net additions
of 241,000 customers in the quarter increased the total number of subscribers to
4.9 million, a 27.6 percent increase over the second quarter of 1996. At STET Hellas,
NYNEX's Greek cellular partnership, the number of customers rose 64 percent to 285,000.
NYNEX's new wireless ventures also continued their strong starts: in less than eight
months of operation, PrimeCo Personal Communications, NYNEX's PCS partnership, gained
195,000 subscribers, and Excelcomindo in Indonesia gained 80,000.
- In information services, NYNEX Information Resources Company (NIRC) increased
the total number of advertisers 6.9 percent over the second quarter of last year.
The number of advertisers on BigYellow (SM), NIRC's industry-leading on-line shopping
directory, more than doubled, and the number of visits increased to nearly two million
NYNEX is a global communications and media corporation 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, and the Czech and Slovak republics. The corporation is a
leader in telecommunications, wireless communications, directory publishing and video
entertainment and information services. NYNEX is also managing sponsor of FLAG --
Fiberoptic Link Around the Globe -- the world's longest undersea fiber optic communications
cable. NYNEX news releases are available on the Internet at http://www.ba.com/nr/pastnews.html
or via fax for no charge at 1-800-331-1214.