Growth in Core Business, International Expansion Drive Results
CHICAGO, April 14 /PRNewswire/ -- Ameritech (NYSE: AIT) today reported
record first-quarter revenues and its 18th consecutive quarter of double-digit
profit growth before one-time items. Major growth drivers for the quarter
were strong volume and customer gains across Ameritech's U.S. operations
combined with expanded contributions from the company's extensive European
Revenues climbed 7.1% to a first-quarter record of $4.13 billion, up from
$3.86 billion in the first quarter of 1997. First-quarter earnings per share
on a diluted basis grew 10.4% to 53 cents, up from 48 cents a year ago, and
basic earnings per share increased 10.2% to 54 cents, up from 49 cents a year
ago, both before one-time items. Net income advanced 10.1% to $590 million
before one-time items, up from $536 million in the first quarter of 1997.
"Ameritech is off to an outstanding start in 1998," said Richard C.
Notebaert, Ameritech chairman and chief executive officer. "We generate
superior value for shareowners through enhanced revenue growth, continuous
cost improvements and disciplined expansion in the United States and Europe.
Our sustained record of success in all of these areas gives us tremendous
momentum and confidence going forward."
Ameritech's first-quarter growth was highlighted by:
* 21% growth in sales of call management services such as Caller ID, call
waiting and voice messaging.
* 4.3% annual increase in access lines to 20.8 million -- including
a 12.7% increase in additional lines and a 63% increase in ISDN lines.
* 23.5% annual growth in cellular customers to 3.3 million. Ameritech
added 636,000 cellular customers over the past 12 months.
Ameritech's significant investments in international businesses
contributed more than one-fourth of the company's earnings growth in the
quarter. With major strategic investments in Belgium, Denmark and Hungary,
Ameritech is the largest foreign investor in European telecommunications, with
a portfolio valued at $7.5 billion.
In January, Ameritech completed its $3.1 billion investment for an
eventual 42% equity stake in Tele Danmark (NYSE: TLD), the national
communications company in Denmark. Since announcement of Ameritech's
investment in Tele Danmark on October 27, 1997, Tele Danmark's stock price has
increased more than 70%.
In April, Ameritech completed the sale of its 24.95% stake in Telecom
Corporation of New Zealand Limited (NYSE: NZT) through a global offering.
Total proceeds are expected to be $2.1 billion. As a result of the sale,
Ameritech expects to record a one-time gain in the second quarter of 1998.
In March, Ameritech outlined plans to reduce cumulative operating expenses
over the next five years by $3 billion. In the first quarter, Ameritech
recorded a one-time after-tax charge of $64 million for restructuring costs,
which are part of that cost containment program. Results for the quarter also
included a previously reported one-time after-tax non-cash accounting charge
of $34 million for currency-related fair value adjustments related to
Ameritech's investment in Tele Danmark. Including these charges, reported
first quarter earnings per share were 44 cents on a diluted basis, 45 cents
basic, and net income was $492 million.
Ameritech serves millions of customers in 50 states and 40 countries.
Ameritech provides a full range of communications services, including local
and long distance telephone, cellular, paging, security services, cable TV,
Internet services and more. One of the world's 100 largest companies,
Ameritech (www.ameritech.com) has 73,000 employees, 1 million shareowners and
nearly $28 billion in assets.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Three Months Ended
March 31 %
1998(a) 1997(a) Change
Revenues $4,133 $3,859 7.1%
Operating expenses (b) 3,228 2,947 9.5%
Operating income 905 912 (0.8)%
Other income, net (c) 51 65 (21.5)%
Interest expense 175 125 40.0%
Income before income taxes 781 852 (8.3)%
Income taxes 289 316 (8.5)%
Net income $492 $536 (8.2)%
Average common shares
outstanding (000) 1,099,650 1,101,054 (0.1)%
common shares (000) 8,968 4,703 n/m
Average shares with
dilution (000) 1,108,618 1,105,757 0.3%
Basic earnings per
common share $0.45 $0.49 (8.2)%
Diluted earnings per
common share $0.44 $0.48 (8.3)%
Dividends declared per
common share $0.30 $0.2825 6.2%
n/m -- not meaningful
(a) Income before one-time items rose 10.1 percent to $590 million from
$536 million in the first quarter of 1997. Diluted earnings per share before
one-time items grew 10.4 percent to $0.53 per share, up from $0.48 per share
in the first quarter of 1997. See notes (b) and (c) for details of the one-time items reflected in 1998.
(b) Results for the first quarter of 1998 include a pretax charge of
$104 million ($64 million after-tax, or $0.06 per share) for a restructuring
charge related to the recently announced $3 billion cost containment program.
(c) Results for the first quarter of 1998 also include a pretax charge of
$54 million ($34 million after-tax, or $0.03 per share) for a currency-related
fair-value adjustment in conjunction with our January 1998 investment in Tele
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
March 31 Dec. 31 Dec. 31
1998 1997 1997
Current assets $3,966 $4,549 $(583)
Property, plant and
equipment 13,900 13,873 27
international 4,741 1,751 2,990
Other assets and deferred
charges 5,346 5,166 180
Total assets $27,953 $25,339 $2,614
LIABILITIES AND SHAREOWNERS' EQUITY
Debt maturing within one year $2,893 $3,036 $(143)
Other current liabilities 4,393 4,205 188
Long-term debt 7,019 4,610 2,409
Deferred credits and
other long-term liabilities 5,121 5,180 (59)
Shareowners' equity 8,527 8,308 219
Total liabilities and
shareowners' equity $27,953 $25,339 $2,614
SELECTED FINANCIAL AND OPERATING DATA
(Dollars in millions)
March 31, March 31, %
1998 1997 Change
Debt ratio 53.8% 47.2% 13.9%
Customer lines (000's) 20,751 19,895 4.3%
Employees 72,944 66,403 9.8%
Telephone company employees 51,393 50,015 2.8%
Customer lines per telephone
company employee 404 398 1.5%
Return on average
equity - annualized 26.3% 27.3% (3.7)%
Return on average total
capital - annualized 15.6% 16.9% (7.7)%
Construction activity $663 $533 24.4%
/CONTACT: Jerrell Ross, 312-750-5265, firstname.lastname@example.org, or
George Stenitzer, 312-609-6166, email@example.com, both of
/Web site: http://www.ameritech.com/
(AIT TLD NZT)
CO: Ameritech; Tele Danmark; Telecom Corporation of New Zealand Limited
-0- (PRN) Apr/14/98 09:26
EOS (PRN) Apr/14/98 09:26 86
-0- (PRN) Apr/14/ 98 9:41
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