GTE Corp. (NYSE: GTE) posted third quarter results of 97 cents a share, beating First Call's prediction of 95 cents a share, and outdoing last year's third quarter by 14 percent.
Shares closed Wednesday at 73 3/8, below their 52-week high of 78 1/2. GTE also announced its merger with Bell Atlantic (NYSE: BEL) is gaining momentum, as Bell's application to the FCC to provide long-distance services in New York is underway. GTE said it expects the merger to be approved in the first quarter 2000.
Net income was $952 million, excluding a net after-tax gain of $416 million, or 42 cents per share, from GTE's sale of its government systems business unit. Including this gain, net income was $1.4 billion with earnings of $1.39 a share. Consolidated revenue was $6.4 billion in the third quarter compared to adjusted revenue of $6 billion in the third quarter of 1998, an increase of 8 percent.
During the quarter, GTE completed the sale of its government systems business to General Dynamics and made other agreements for the sale of non-strategic wireline properties. Higher than expected sale priced for its properties will leave the company with after-tax proceeds in excess of $4 billion, which GTE plans to invest in higher growth Internet, data and wireless businesses.
GTE also completed its acquisition of the Ameritech wireless properties during the quarter, and said its wireless properties will complement the new national business being created by Bell Atlantic and Vodafone AirTouch, once its merger with Bell Atlantic is completed, creating the nation's premier wireless company.
Major contributors to revenue growth for the quarter included internetworking data revenue growth of $134 million or 89 percent; long distance, video and CLEC revenue growth of $110 million or 39 percent; international revenue growth of $76 million or 19 percent; network services data revenue growth of $74 million or 30 percent; and wireless revenue growth of $163 million or 21 percent.
GTE also met the Street in its second quarter earnings.