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Ameritech earnings meet expectations

The Chicago-based Baby Bell and SBC Communications acquisition target reports earnings in line with Wall Street expectations for the fourth quarter.

Ameritech, the Chicago-based Baby Bell being acquired by SBC Communications, reported earnings in line with Wall Street expectations for the fourth quarter.

Citing strong growth in its data services and overseas businesses, Ameritech posted earnings of $684 million, or 61 cents per share, before one-time charges and gains. That matched Wall Street estimates, according to a consensus of financial analysts polled by First Call.

"Customer demand is robust across the board, and we're setting a fast pace in our industry's high-potential growth segments," said Ameritech CEO Richard Notebaert in a statement.

For the year as a whole, the company's earnings grew 11.4 percent to $2.61 billion, up from $2.35 billion in 1997. Last year was the sixth in a row the company posted double-digit earnings growth, executives said.

More than a quarter of the company's earning growth, however, came from its European investments. A full third of the earnings growth for the year came from data services, which brought in about $1.7 billion for the company. The character of this revenue growth does show how far the Baby Bell has stepped from its traditional, regionally-based local phone businesses.

Nevertheless, Ameritech has lagged behind some of its Baby Bell brethren in rolling out the most modern consumer-focused data strategies. While its ISDN and corporate data services are strong, it has yet to announce a plan for broad rollout of DSL, or digital subscriber line technology, in its area.

This is likely the last time that Ameritech will independently report a year's worth of earnings. The company's shareholders have already approved a merger with SBC, which would give the joint company close to a third of the nation's local phone customers.

State and federal regulators are still reviewing that deal, which has come under staunch criticism from consumer groups and rival telephone companies.