U.S. Phone Companies Tap Profits From Additional Lines

Earnings reported Tuesday by three of the biggest U.S. phone companies surged as businesses and consumers hooked up more lines to take advantage of the Internet and other data services.

Sprint Corp. led the group with a 39% increase in first-quarter earnings, its best quarter in a decade. Ameritech Corp.’s earnings rose 14%, whereas GTE Corp. posted a 12% increase.

The profit increases reflect the growing use of computer services, faxes and second phone lines that let people work from home. The results come as a new regulatory environment starts to create more opportunities for phone companies in the $200-billion-a-year U.S. telecommunications market.

Sprint, the nation’s No. 3 long-distance company, said its profit from continuing operations rose to $312.2 million, or 78 cents a share, from $224.7 million, or 64 cents, a year ago. Results beat an average estimate of 74 cents a share.

GTE, the nation’s largest local phone service provider, said profit from operations rose to $608 million, or 62 cents a share, compared with net income of $543 million, or 56 cents, a year ago. The results were in line with a forecast of 62 cents.

Ameritech, the Chicago-based Baby Bell, said net income rose to $478.3 million, or 86 cents a share, compared with profit from operations of $418.8 million, or 76 cents, a year ago. Results beat a mean estimate of 84 cents.

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Wells Fargo & Co. said its first-quarter earnings increased 13%, boosted by a rise in noninterest income.

The San Francisco-based company said its net income increased to $264 million, or $5.39 a share, from $233 million, or $4.41, in the first quarter of 1995. That exceeded the average forecast of $5.28.

The bank, which this month completed its acquisition of Los Angeles-based First Interstate Bancorp, said its results don’t include First Interstate’s. The second-quarter financial statement will combine the two companies’ operations.

Also Tuesday, Wells said it will buy back as much as 10% of its shares.

Other banks also reported first-quarter earnings, including Chase Manhattan Corp. The nation’s largest banking company lost $89 million because of the one-time $1.65-billion cost of its merger with Chemical Banking Corp., but it said that excluding that cost, earnings rose 44% to $937 million, or $1.98 a share, from $650 million, or $1.37 a share, the year before. The results exceeded expectations of $1.65.

Citicorp, the No. 2 banking company, saw profit rise 6.4% to $914 million, or $1.82 a share, from $829 million, or $1.71 a share, a year earlier. The earnings fell below Wall Street’s expectations of $1.87.

H.F. Ahmanson, which operates the largest U.S. thrift, said its first-quarter earnings rose 28%, helped by a gain on the sale of loans. The parent company of Home Savings of America said net income was $64.8 million, or 45 cents a share, compared with profit from operations of $50.7 million, or 33 cents, a year earlier.

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Philip Morris Cos. said its earnings rose 17.2% in the first quarter, led by gains in its Marlboro brand of cigarettes and worldwide growth of its tobacco business.

The tobacco, food and beer conglomerate reported the sale of 230 billion cigarettes in the first three months of 1996, an 11.3% increase from a year earlier. It earned $1.57 billion, or $1.89 a share, in the first quarter, compared with $1.34 billion, or $1.57 a share, in the same 1995 period. The result was in line with a forecast of $1.88.

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At a Glance:

Mattel said its first-quarter earnings rose 11% to $29.9 million, or 11 cents a share, from $27 million, or 9 cents, a year ago. . . . Hilton Hotels reported a 14% rise in first-quarter profit, earning $36.6 million, or 75 cents per share, compared with $32 million, or 66 cents per share, a year ago. . . . America West Airlines said its profit more than doubled in the third quarter, rising to $13.7 million, or 27 cents per share, compared with $5.2 million, or 15 cents a share, in the same period in 1995.

Jacobs Engineering Group reported second-quarter earnings of $9.8 million, or 38 cents a share, compared with $7.5 million, or 30 cents, in the year-ago period. . . . Pfizer earned $517.2 million, or 81 cents per share, compared with $420.4 million, or 68 cents per share, in the first three months of 1995. . . . Johnson & Johnson said it earned $790 million, or $1.19 per share, compared with $654 million, or $1.02 per share, in the first quarter of 1995. . . . Weyerhaeuser’s first-quarter net income fell 31% to $142 million, or 72 cents a share, from $206.6 million, or $1, a year earlier.

In its first report since the end of a lengthy United Auto Workers strike, Caterpillar said first-quarter profit dropped slightly to $296 million, down 1% from $300 million a year earlier. But earnings per share rose to $1.53 from $1.50 because fewer shares were outstanding as a result of a stock buyback. . . . Genentech said first-quarter earnings fell a more-than-expected 12% to $38.2 million, or 31 cents a share, down from $43.4 million, or 36 cents, a year earlier. . . . Rubbermaid said its first-quarter earnings fell 23% to $41.7 million, or 27 cents a share, down from $54.1 million, or 34 cents, in the year-ago period.

Home Shopping Network reported first-quarter earnings of $2.24 million, or 2 cents a share, compared with a loss from operations of $7.5 million, or 8 cents, a year earlier. . . . Eastman Kodak said its first-quarter profit rose 4.6% to $274 million, or 80 cents a share, up from $262 million, or 77 cents a share, in the same period last year. . . . Polaroid said a loss from operations narrowed to $3.1 million, or 7 cents a share, from $25.8 million, or 57 cents, a year earlier. . . . Best Buy’s fourth-quarter earnings fell 29% to $19.8 million, or 46 cents a share, down from $28.1 million, or 63 cents, a year ago. . . . Qualcomm Inc. said second-quarter net fell to $1.46 million, or 2 cents a share, from $6 million, or 11 cents, a year ago.