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Regional Bells, MCI Post Record 2nd-Quarter Results

July 19, 1996|From Times Wire Services

Regional telephone companies posted strong second-quarter earnings Thursday, while AT&T Corp. reported a modest gain in profit amid increased competition in the long-distance market, sending its stock sharply lower.

Regional Bells Pacific Telesis, SBC Communications and Bell Atlantic posted record results as did No. 2 long-distance provider MCI.

Regional Bells are raring to enter the long-distance market in force early in 1997, now that the recent reform of telecommunications laws has freed them from the limits of local phone service.

These companies have thrived as they entered new markets, and consumers added phone lines for their computers, made longer calls, used more value-added services such as caller ID and steadily bought more wireless phones.

AT&T, the top long-distance company, said its earnings rose to $1.491 billion, or 92 cents a share, from $1.355 billion, or 85 cents a share, in the year-ago quarter. The earnings were a penny above expectations.

"We have anticipated increasing competition, and we intend to deal with it by providing bundles of services," said Rick Miller, AT&T's chief financial officer.

Separately, AT&T declared a special dividend of about 82.4% of Lucent Technologies' stock that it holds, completing the spinoff of the subsidiary that began in April.

Washington-based MCI, which is clashing with AT&T in discount promotions to home callers, said its net income rose 15% to a record $300 million from $260 million. Earnings per share, which rose to 43 cents from 38 cents, matched analysts' forecast.

SBC, the parent of Southwestern Bell, saw second-quarter earnings grow 13.3% to a record $501 million, or 82 cents a share, from $442 million, or 73 cents a share, a year ago--a penny above Wall Street expectations. It was the San Antonio-based company's 20th consecutive quarter of double-digit earnings growth.

San Francisco-based PacTel, which has announced plans to merge with SBC, said its profits rose to $281 million, or 66 cents a share, from $260 million, or 61 cents a share, in the year-ago period. The earnings were in line with estimates.

Bell Atlantic said its profits rose 10.6% to a record $494.3 million, or $1.12 a share, from $447.1 million, or $1.02 a share, a year ago. The Philadelphia-based company's operating revenue edged down to $3.3 billion from $3.6 billion.

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