Bell Atlantic trumps expectations
The regional telephone company posts earnings that beat Wall Street forecasts, with data services providing a major source of revenue.
After four full quarters since the merger of Bell Atlantic and Nynex, Bell Atlantic said that strong operating performances in several key units lifted its adjusted earnings to 69 cents per share on adjusted net income of $1.1 billion. A consensus of analysts expected the company to earn 68 cents per share, according to First Call.
The company posted earnings per share of 62 cents on net income of $969.4 million in the year-ago quarter.
Shares of Bell Atlantic moved higher on the earnings news, rising 1.14 percent to 49.94. The stock has traded as high as 53 and as low as 37.38 during the past 52 weeks.
In July, Bell Atlantic and GTE announced that they had agreed to a merger that would create a company capable of providing a wide range of services, including long distance, local, and wireless services, as well as Internet access. Consummating the deal is expected to take at least a year.
Bell Atlantic said that its third-quarter results have been adjusted for charges announced on October 13, mainly noncash in nature, primarily for the completion of a retirement incentive program, write-downs of certain international investments, and merger transition charges.
The company said that nearly half of its telcom revenue gains came from sales of data-related services.
"[The revenue from data services] is a clear sign of where our future opportunities lie," Bell Atlantic vice chairman, president, and CEO Ivan Seidenberg said in a statement. "We are rapidly building the network capabilities to provide the high-speed, digital connectivity that our customers require, whether they are global enterprises or small businesses or individual households."
The company said that demand for communications services in the Bell Atlantic region, particularly data and vertical services such as Caller ID, drove telecom revenue growth up 4 percent compared to third quarter 1997. The number of access lines in service grew 4.5 percent to 41.3 million, and access minutes of use increased 8.5 percent. More than two-thirds of telecom revenue growth came from sales of data and vertical services.
Bell Atlantic added that demand for digital data services increased in all markets, particularly in the enterprise and general business markets.