Bell Atlantic Corp. (NYSE: BEL), said on Tuesday its first quarter profits rose 10 percent to 80 cents a share, in line with First Call's expectations, amid strong demand for data and wireless services and telephone features such as call waiting.
Shares in the local telephone company, which is set to buy GTE Corp. (NYSE: GTE), closed at 61 15/16, not far below its 52-week high of 69 1/2. Bell Atlantic became the first Baby Bell created by the 1984 break-up of AT&T Corp. (NYSE: T) to provide long-distance telephone services in its home market
Accelerated revenue growth was cited as the reason for booming profits. First quarter revenue gained 7.1 percent to $8.5 billion from $8.0 billion a year ago. Its core domestic telephone service revenue grew 3.9 percent, with about 84 percent of that growth coming from sales of data services.
Earnings excluding one-time items, rose to $1.3 billion, or 80 cents a share, compared with $1.2 billion or 73 cents a share a year ago.
Including one-time charges, Bell Atlantic's earnings fell to $731 million, or 46 cents a share, compared with $1.1 billion or 72 cents a share a year ago..
Data revenue rose 31.8 percent to $892 million. Bell Atlantic said it doubled sales of high-speed Internet access, ending the quarter with more than 60,000 digital subscriber lines in service.
"Not only are our growth engines firing on all cylinders, but our traditional business is continuing to expand as well," said Bell Atlantic Chairman Ivan Seidenberg in a company release.
Bell Atlantic also exceeded its customer acquisition target for the quarter, adding 428,000 residential customers in New York state. It said the unit's average revenue per customer was in line with industry trends, and its churn rate was below the industry average.
Sales of calling features, such as Caller ID and voice mail, increased 40.7 percent.
The company's wireless business ended the quarter with 12.7 million global proportionate wireless subscribers, up 39.7 percent over first quarter 1999. Bell Atlantic recently combined its operations with Britain's Vodafone AirTouch Plc (NYSE: VOD) to create the nation's largest wireless carrier. The companies plan to launch an initial public offering of part of the venture, called Verizon Wireless, later this year.
Rival Sprint, which is merging with MCI Worldcom (Nasdaq: WCOM), had success with the recent spin-off of part of its wireless business, Alamosa (Nasdaq: APCS). AT&T is also set to spin off its wireless unit this week.
Bell Atlantic's planned $53 billion purchase of Irving, Texas-based GTE is expected to close later this spring pending approval by the Federal Communications Commission. The combined company will be called Verizon.