The sale of its interest in New Zealand’s telephone company tripled Ameritech Corp.’s second-quarter earnings–but even without the one-time gain, advances in the firm’s core phone business gave it a double-digit increase.
Net income was $1.71 billion, or $1.54 per diluted share, which was more than three times greater than the income of $537 million, or 49 cents pershare, a year earler. Excluding one-time gains and charges for this year’s second quarter and the year-earlier period, income was up 11.4 percent, to $695 million, or 63 cents per diluted share, from $624 million, or 57 cents per diluted share.
Revenue was up 7.6 percent, to $4.29 billion from $3.99 billion.
For the first half of the year, net income rose to $2.20 billion, or $1.98 per diluted share, from $1.11 billion, or 97 cents per diluted share. Revenues rose 7 percent, to $8.42 billion from $7.84 billion.
Ameritech, which said in May it will merge with SBC Communications Inc., the Baby Bell based in San Antonio, showed solid gains in sales of phone services.
The quarter saw annual growth of cell-phone service of 21 percent as well as an annual 21 percent boost in sales of enhanced services such as Caller ID and Call Waiting.
Sales of high-speed Internet connections using digital service were up 64 percent from a year earlier.
SBC, the firm that will take over Ameritech subject to shareholder and regulatory approval, also announced a strong quarter Thursday.
Earnings climbed nearly 20 percent, to $966 million, or 52 cents per diluted share, from $808 million, or 44 cents per share, in the year-earlier period. Revenues for SBC were up 7.9 percent, to $6.6 billion from $6.1 billion.
Meanwhile, FMC Corp. reported a 12 percent increase in income from operations–to $68 million, or $1.89 per share–meeting analysts expectations for the second quarter ended June 30.
However, last year’s sale of its defense-industry business lowered the Chicago-based industrial and agricultural products manufacturer’s overall profit margins.
FMC’s net income dropped 7 percent, to $67.6 million, or $1.89 per diluted share, from $72.7 million, or $1.90 per diluted share, a year earlier. The dip in profits is a result of the company’s sale of United Defense LP to The Carlyle Group in August 1997.
Since the sale, the company’s defense-industry business has been accounted for as discontinued operations. The company reported $12.1 million and $30.9 million in discontinued operations for the second quarter and six-month period, respectively.
The company said strong machinery and equipment sales offset much weaker industrial chemical markets.
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FMC’s revenues were flat at $1.15 billion in the second quarter. For the six months, net income dropped 48 percent, to $58.3 million, or $1.68 per diluted share, from $112.7 million, or $3.02 per share, in the year-earlier period. Revenues rose 2 percent to $2.2 billion.
AMERITECH CORP.
EARNINGS DIGEST
In millions except for per-share data %%
2nd Qtr. June 30 1998 1997
Revenues 4,289 3,986
Extraordinary gain a1,012
Extraordinary loss b87
Net income (loss) 1,707 537
Per share (basic) 1.55 0.49
Per share (diluted) 1.54 0.49
6 mos. 1998 1997
Revenues 8,422 7,845
Net income (loss) c2,200 1,073
Per share (basic) 2.00 0.98
Per share (diluted) 1.98 0.97
a–After-tax gain equivalent to 91 cents per diluted share from sale of
interest in the New Zealand phone company
b–After-tax charge of 8 cents per share related to Ameritech’s costs in
workforce restructuring at Belgian phone company
c–Results include gain from sale of interest in New Zealand phone
company; an after-tax charge of $64 million, or 6 cents per share, for a
restructuring charge related to a cost-containment program, and an
after-tax charge of $34 million, or 3 cents a share, for currency-related
adjustment in conjunction with January investment in the Danish phone
company.
%%
FMC CORP.
EARNINGS DIGEST
In millions except for per-share data %%
2nd Qtr. June 30 1998 1997
Revenues 1,155 1,153
Net income (loss) 67.6 a72.7
Per share (basic) 1.95 1.95
Per share (diluted) 1.89 1.90
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Avg. shares 35.7 38.3
6 mos. 1998 1997
Revenues 2,194 2,155
Extraordinary loss c36.1
Net income (loss) 58.3 b112.7
Per share (basic) 1.68 3.02
Per share (diluted) 1.63 2.95
Avg. shares 35.7 38.2
a, b–Includes after-tax income of $12.1 million, or 32 cents per diluted
share, in the second quarter and $30.9 million, or 81 cents per diluted
share, in the six months from sale of United Defense LP to The Carlyle
Group.
c–After-tax cost of change in accounting principle %%