Dow Jones-Bound SBC Exceeds Expectations

SBC Communications Inc., the largest U.S. local telephone company, said Wednesday that its third-quarter profit rose a better-than-expected 21% on demand for data services from business customers. The stock next week will become a component of the Dow Jones industrial average.

Separately, telecommunications companies Qwest Communications International Inc. and Global Crossing Ltd. reported earnings in line with estimates as revenue soared.

SBC, which owns Southwestern Bell, Pacific Bell, Cellular One, and which acquired Ameritech Corp. earlier this month, said its earnings before one-time items were $1.28 billion, or 64 cents a share, up from $1.04 billion, or 53 cents, a year ago, and 3 cents better than the estimate of analysts surveyed by First Call Corp.

Profit rose to $1.97 billion, or 57 cents a share, from $1.68 billion, or 49 cents, a year ago, when stated as if the acquisition of Ameritech had taken place before the start of each period.

Operating revenue rose 7.6% to $7.8 billion, while revenue, including Ameritech, grew 9.4% to $12.5 billion. Expenses rose 8.9% to $9.21 billion.

SBC, like other local phone companies, has been investing heavily in new data services. Data sales rose 43% to $1.5 billion. SBC’s wireless revenue increased 25%, and its domestic wireless customer base grew 25% to 10.3 million. In its local phone operations, SBC’s revenue from enhanced services such as caller identification rose 12% to $861 million.

SBC said it expects earnings of $2.12 to $2.17 a share for the full year and $2.20 to $2.30 in 2000.

SBC shares jumped $2.63 to $48.19 on the New York Stock Exchange.

* Qwest posted an operating profit of $19.8 million, or 3 cents a share, in its third quarter, a turnaround from a loss of $11.4 million, or 2 cents, a year earlier, as revenue from data and Internet services more than tripled. The results at Qwest, which plans to merge with US West Inc., matched analyst estimates. The figures exclude $25 million in charges related to its pending purchase of US West and other acquisitions. Revenue rose 26% to $1.02 billion, as revenue from data and Internet services soared more than 200%.

* Global Crossing, which recently bought long-distance carrier Frontier Corp., posted a smaller-than-expected third-quarter loss as it added customers and revenue increased. The company’s pro forma loss was $34.1 million, or 4 cents a share, contrasted with a profit of $11.7 million or 2 cents, a year ago. Analysts were expecting a larger loss of 10 cents, according to First Call.

Pro forma revenue rose 7.6% to $929 million. Frontier, as a stand-alone company, showed stagnant revenue growth of 2.4% and a 7.5% drop in net income. Frontier, like other long-distance companies, was hurt by escalating price wars and competition.

Qwest fell 56 cents to $33.88, and Global Crossing rose $1.06 to $35.19, on Nasdaq.