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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.

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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.

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

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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.

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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.

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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.

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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.

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At a Glance:

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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.


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