PacTel’s Yearly Profit a Record $1.19 Billion

Despite flat fourth-quarter earnings, Pacific Telesis Group said Tuesday that its 1988 profit topped the billion-dollar mark for the first time. Net income for the year was up 27.1% from a year earlier to $1.19 billion, on revenue that rose 3.6% to $9.48 billion.

The San Francisco-based company noted that its 1987 results were sharply reduced by a number of one-time expenses. These included the costs of trimming its payroll through an early retirement program and a state-ordered refund to customers of the company’s main subsidiary, Pacific Bell. Without those one-time charges, 1988 earnings were up 6.4% from the year before.

Fourth-quarter net was $249 million, up from $150 million a year earlier. Discounting the effect of the special charges in 1987, however, the results for the final quarter of 1988 were “essentially flat,” the company said.

PacTel Personal Communications, an unregulated subsidiary that provides cellular mobile-phone and electronic-paging services, showed continued rapid growth and increased profitability. The cellular-paging unit generated $381.1 million in revenue last year, up from $270.1 million in 1987, and contributed $16.6 million to corporate profit, up from $5.7 million.

“Cellular has experienced explosive growth since we began acquiring properties in 1985 and 1986,” said Pacific Telesis Chairman and Chief Executive Sam Ginn. “This is a critical source of growth for us in the future.”

Since Pacific Telesis’ formation five years ago after the breakup of the old Bell System, Ginn said, the regional holding company’s earnings have grown an average of 7.3% a year.

Also Tuesday, Southwestern Bell, Pacific Telesis’ counterpart in St. Louis, said a strong fourth quarter helped increase net income for the fourth straight year--but only barely. The company earned $1.06 billion last year, just topping 1987’s $1.05 billion.