NEW YORK -- NYNEX Corporation (NYSE:NYN) today announced double-digit earnings growth for the fourth consecutive quarter, as first quarter net income, including a gain on the sale of an investment, increased to $407.3 million, or $0.94 per share, compared to $304.0 million, or $0.72 per share, in the first quarter of 1995. Excluding the gain, net income for the quarter was $361.5 million, up 18.9 percent over the first quarter of last year, and earnings per share were $0.83, an increase of 15.3 percent.
Consolidated revenues increased 5.6 percent over the first quarter of 1995 to $3.3 billion, reflecting across-the-board volume growth in all major business units. Telecommunications revenue increased 5.1 percent to $3.0 billion, while revenues from other consolidated business units increased 9.7 percent. Bell Atlantic NYNEX Mobile (BANM) revenues, which are not consolidated, grew 29.6 percent. Including NYNEX's share of BANM revenues and its other unconsolidated businesses, the corporation's revenue growth was 6.9 percent.
This revenue growth, combined with the quarter's productivity gains, resulted in a 1.0 percentage point improvement in operating margin, to 21.4 percent, and a 10.6 percent increase in operating income.
"We continue to make progress in driving top-line growth and margin expansion," said NYNEX Chairman and Chief Executive Officer Ivan G. Seidenberg. "As in previous quarters, we invested in marketing to enhance revenues, and in systems, processes and people to improve service quality and handle our increased volumes, while simultaneously delivering double-digit earnings growth.
"We also continue to build value through investments in new businesses. Our strong cellular results and the improving performance of NYNEX CableComms have enabled us to improve new business earnings year-over-year at the same time we develop projects such as our Indonesian wireless partnership, our PrimeCo PC alliance, and Big Yellow, our powerful new Internet directory service.
"When you combine these results with Bell Atlantic's strong first quarter, you can see why we are so excited about our future together. Our new company will be extremely well positioned to provide value for our customers and our shareholders. Our shared goal is to sustain our present momentum through the closing and start from a position of even greater strength."
Other Results Of First Quarter Operations
- Telecommunications revenue growth of 5.1 percent over the first quarter of 1995 was driven by strong sales of value-added, business and usage services. Sales of services such as PhoneSmart(sm), Voice Messaging and Voice Dialing were up 38 percent over the first quarter of 1995; the number of ISDN lines in service increased 65 percent to more than 97,000, and sales of private line services, led by NYNEX Enterprise Services, rose for the sixth consecutive quarter, increasing 8.0 percent. Total usage revenues, including wholesale access, retail toll, and local usage, increased 4.1 percent, as access minutes of use increased 11.0 percent and strong sales of optional calling plans continued. During the quarter, NYNEX also successfully implemented intraLATA presubscription in New York.
- Total access lines, including NYNEX's share of unconsolidated ventures, grew 4.9 percent over the first quarter of 1995. Growth included a record-setting 3.6 percent gain in the northeastern United States, where access lines increased by 596,000 to 17.3 million. Business lines accounted for 62.9 percent of this gain, with Centrex sales increasing 16.9 percent, while residence second lines grew 10.9 percent. In the United Kingdom, NYNEX CableComms N access lines grew 132.7 percent, as residence lines and business lines increased to 268,000 and 18,200 respectively. In Asia, where NYNEX is a partner in several wireline joint ventures, TelecomAsia increased the number of lines in service in Bangkok to 753,000, up 73 percent compared to the first quarter of 1995. BayanTel got off to a rapid start in the Philippines, constructing the first 30,000 lines of a 300,000-line project, with 23,000 of them already in service.
- The number of worldwide cellular customers grew dramatically. At BANM, net additions in the quarter of 217,000 customers increased the total number of subscribers to 3.6 million, up 41.9 percent since the first quarter of last year. In addition, STET Hellas, NYNEX's wireless partnership in Greece, had customer growth of 68.2 percent. Initial testing and construction also began at PrimeCo Personal Communications, NYNEX's partnership with Bell Atlantic, US West and AirTouch, and at Excelcomindo, NYNEX's Indonesian partnership. As a result of its investments in Indonesia and PrimeCo Personal Communications, NYNEX's proportionate share in cellular partnerships now exceeds 80 million POPs, nearly 60 million more than in the first quarter of 1995.
- Cable television subscriber growth at NYNEX CableComms, NYNEX's United Kingdom subsidiary, was up 62.3 percent over the first quarter of 1995, with the ratio of premium to basic units improving to 202 percent from 148 percent in the first quarter of last year.
- Growth in information services was also strong. The number of NYNEX Yellow Pages advertisers grew 3.5 percent, including a 21.1 percent increase in international advertisers. In electronic publishing, NYNEX Information Resources Company (NIRC) launched Big Yellow(sm), the next generation of its national on-line business directory, and immediately doubled usage to more than 200,000 "hits" a day, compared to 10,000 a week when NIRC introduced interactive yellow pages on Prodigy in the first quarter of last year. The number of NIRC's on-line advertisers increased 60 percent over the first quarter of 1995. Big Yellow will be displayed as a choice on the main navigation bar of Infoseek GuideTM, the Internet's most frequently used search service, which receives 35 million hits per day. NIRC recently announced it has taken a five percent preferred equity position in Infoseek.
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.
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