MCI Fourth-Quarter Profit Rises 17%

From Times Wire Services

MCI Communications Corp. said Tuesday that its fourth-quarter profit rose 17% as a record number of long-distance customers accounted for the largest increase in phone traffic in five years.

It reported net income of $284 million, or 41 cents a share, up from profit from operations of $243 million, or 35 cents, a year ago. The results are a penny above the 40-cents-a-share average estimate of an analysts’ survey.

For the first time, the Washington-based company separated its long-distance results from new ventures such as wireless to force Wall Street to put a higher value on the firm. The strategy worked, analysts said.

“The earnings power in the long-distance business is greater than the market expected,” said William Deatherage, an analyst at Bear, Stearns & Co.


Eli Lilly & Co. reported an 18% increase in fourth-quarter profit and said increased sales abroad helped offset pressure on prices in the United States.


The Indianapolis-based drug maker earned $342.6 million, or 63 cents a share, for the quarter ended Dec. 31, compared with $290.1 million, or 50 cents, a year earlier.

Lilly said sales have been hurt by discounts demanded by health maintenance organizations and other managed-care groups, and by competition from cheaper generic versions of its antibiotic Ceclor.

However, sales for the year of its blockbuster antidepressant, Prozac, rose 24% to more than $2 billion.


McGraw-Hill Cos. said earnings rose 9% for the fourth quarter, and it announced that it will cut as many as 800 jobs, or about 5% of its work force as part of a plan to reduce costs.

The New York-based information and media company said strong results at Standard & Poor’s, the credit-rating agency, at BusinessWeek magazine and in its educational publishing division all contributed to the strong results.

Net earnings rose to $54.5 million, or $1.09 a share, for the quarter, from $49.9 million, or $1.01, for the comparable 1994 period. Sales grew 7.5%, to $749.6 million from $697.3 million.

The results include a pretax charge of $26.8 million for the job cuts and other elements of the cost-reduction plan, and a $23.8-million gain on the sale of part of its Shepard’s legal publishing operation to a unit of Thomson Corp. last year.

The job cuts will be companywide, achieved through attrition and layoffs, spokesman Mark Harrop said. The company now has about 15,500 employees worldwide.


Estee Lauder Cos. said its fiscal second-quarter profit rose 19% on increased sales worldwide of its cosmetic, fragrance and skin-care products.

The New York-based maker of the Estee Lauder, Clinique and Aramis brands, among others, said profit from operations for the quarter ended Dec. 31 was $61.1 million, or 48 cents a share, compared with a net income of $51.3 million a year ago.

The results were restated as if the company, which conducted an initial public offering of common stock Nov. 17, had been public since July 1.


RJR Nabisco Holdings Corp. said its fourth-quarter earnings rose 1.4% before charges as the company posted its best increase in U.S. cigarette sales in almost three years.

The New York-based maker of Camel and Winston cigarettes said profit from operations was $207 million, or 60 cents a share, matching the estimate of 12 analysts polled by Zacks Investment Research. A year ago, it earned $204 million, or 52 cents. Revenue rose 6.9%, to $4.32 billion from $4.04 billion.


At a Glance:

ITT Industries Inc., in its first earnings report since ITT Corp. split up, said fourth-quarter profit from continuing operations fell to $34 million, or 28 cents a share, from net income of $84 million, or 67 cents, a year ago. . . . Cypress-based PacifiCare Health Systems Inc.'s first-quarter net income climbed to $28 million, or 88 cents a share, compared with $20 million, or 71 cents, a year ago. . . . Pasadena-based Avery Dennison Corp. reported a 37% increase in net income for the fourth quarter to $37 million, or 71 cents a share, from $28.5 million, or 52 cents, a year earlier.