Local, Long-Distance Services Raise Telecom Firms’ Earnings

Major telecommunications companies Sprint Corp., GTE Corp. and Ameritech Corp. reported strong first-quarter earnings Tuesday, citing gains in revenue from local, long-distance and wireless services.

Kansas City, Mo.-based Sprint, the nation’s No. 3 long-distance carrier, said higher-than-expected first-quarter earnings were aided by an 8.5% rise in long-distance revenue and a 6% rise in local phone revenue.

It also cited a 14.5% increase in use of its long-distance network and lower-than-expected costs so far for setting up its new wireless network.

The company reported first-quarter net earnings of $290 million, or 67 cents per share, on revenue of $3.62 billion. A year earlier, Sprint earned $309.3 million, or 77 cents a share, on revenue of $3.37 billion.

While lower than last year’s first quarter, the earnings beat Wall Street expectations of 63 cents a share.

“We continue to believe double-digit volume, revenue and operating income growth for the full year are achievable [in the long-distance market],” Art Krause, Sprint’s chief financial officer, said. .

Analysts say the company has done well to weather the ferocious competition raging through the long-distance market in which GTE already is competing and the so-called Baby Bell regional telephone companies are soon expected to enter.

Sprint stock rose 62.5 cents to close at $44.375 on the New York Stock Exchange.

Stamford, Conn.-based GTE reported a 9% rise in first-quarter profit, due to stronger sales of both wire-line and wireless services.

The company, the only large phone company so far able to offer both local and long-distance calling, earned $665 million, or 69 cents a share, on revenue of $5.28 billion.

A year ago, it earned $608 million, or 62 cents a share, on revenue of $4.95 billion.

GTE’s income slightly exceeded Wall Street expectations.

Domestic cellular-service revenue rose 11% from a year ago. At the end of March, GTE had 4 million domestic cellular customers, an increase of 30% from a year ago, and 1 million long-distance customers, from none a year ago.

GTE shares rose 75 cents to close at $43.50 on NYSE.

Chicago-based Ameritech, a Midwest regional Bell, reported higher first-quarter earnings helped by a 50% increase in paging customers to 1.2 million, and a 26% rise in sales of call management services such as Caller ID, call waiting and voice messaging.

Ameritech earnings rose to $536 million, or 97 cents a share, from $478 million, or 86 cents a share, a year ago. Revenue rose to $3.86 billion from $3.57 billion a year ago.

Ameritech shares gained $1.375 to close at $58.125 on NYSE.

Meanwhile, LCI International Inc. said first-quarter profit beat expectations on a 39% increase in traffic on its telephone network.

Net income of the McLean, Va.-based telecom firm rose 34% to $20.5 million, or 24 cents a share, from $15.3 million, or 18 cents a share, in the year-earlier period. The results beat the average estimate of 23 cents a share.