GTE’s ’88 Profit Hits Record $1.2 Billion

GTE said Tuesday that it earned a record $1.2 billion in 1988, a 9% increase in a year that saw a change in its leadership, a major corporate overhaul and reduced losses from its investment in US Sprint.

Revenues for the Stamford, Conn., telecommunications and electric products giant increased 7% from the year before to $16.5 billion. More than 70% of that came from local telephone subsidiaries in 31 states and Canada, led by Thousand Oaks-based GTE California, the state’s second-biggest phone company.

‘Good, Solid’ Performance

Although the company reported earnings of $326 million in the fourth quarter, down from $334 million a year earlier, the 1987 results were swollen by an accounting change and proceeds from the sale of property. The company said its operating income, which excludes those extraordinary gains, increased 6% in the final quarter of last year, while revenue rose 5% to $4.3 billion.

Despite all the changes at GTE last year, Paine Webber analyst Jack Grubman said he saw “nothing out of the ordinary” in the 1988 results and called the last quarter “a good, solid” performance. In trading on the New York Stock Exchange, GTE closed at $46.375, up 87.5 cents.

Besides promoting James L. Johnson to president in April, GTE reorganized operations in a program designed to eliminate 7,000 jobs by 1992 from a work force that now totals 85,000. In addition, the company reduced its participation in what had been a money-losing joint venture with United Telecommunications in Sprint, the nation’s third-largest long-distance phone company. GTE’s original 50% share in the company, which is finally beginning to turn a profit, was cut to 19.9%.

GTE’s continued strong earnings have not been overlooked by the Communications Workers of America, whose three-year contract covering 16,000 workers at GTE California expires March 4. Four other CWA contracts with GTE subsidiaries, covering 7,450 workers in seven states, also run out later this year.

“GTE is an extremely profitable company, and our members are the ones who have made it profitable,” CWA President Morton Bahr said as negotiations began late last month in California. Bahr called GTE California “one of the most profitable, productive jewels in the GTE crown,” and vowed to “expand and improve on our current level of wages, benefits and rights on the job.”