Latest Quarterly results are out:
SBC Q2 results solid, some 97 charges remain
SAN ANTONIO, July 31 (Reuter) - SBC Communications Inc second quarter operating results, excluding $1.6 billion in
special charges recorded during the period, were essentially in line with Wall Street expectations.
The $1.6 billion in second quarter charges was at the low-end of the $1.6 billion to $1.9 billion range SBC previously
announced June 19 to cover costs from merging with Pacific Telesis and to fund various regulatory requirements.
The company said it expected $300 million to $500 million in additional charges to cover similar costs during the rest of 1997.
1997 second quarter operating earnings were $803 million, or $0.90 per share, a 2.6 percent increase over the $824 million,
or $0.87 per share, reported a year ago. The $0.90 a share compared to the First Call consensus estimate of $0.91.
Second-quarter revenues on a comparable basis were up 6.7 percent to $6.1 billion as SBC's wireline and wireless businesses
continued to show solid growth, the company said.
Annual access line growth was 4.1 percent, driven by 6.2 percent growth in business lines, and 14.5 percent growth in
residential additional lines. Local access lines grew 4.9 percent at Southwestern Bell and 3.4 percent at Pacific Bell.
``The revenues growth looked a little bit flat, but the bottom line numbers were roughly in line with the Wall Street consensus,''
PaineWebber analyst Eric Strumingher said.
Wireless subscribers increased 24.4 percent over the last 12 months to nearly five million subscribers, with the addition of
275,000 subscribers during the quarter, one of SBC's strongest quarterly gains ever, it said.
In a statement, Edward Whitacre, SBC's chairman and chief executive, said the rollout of new Personal Communications
Services (PCS) in the Pacific Bell service region of California and Nevada was running ahead of schedule.
He said its PCS service added 97,000 net new subscribers during the quarter, for a total of 123,000.
``The response to our PCS offering has led us to increase our end-of-year subscriber target to 325,000 subscribers from
250,000,'' Whitacre said.
In all, we're targeting nearly one million net new subscribers in our traditional cellular and new PCS markets during 1997,`` he
added.
The $1.6 billion in second quarter charges included $213 million to cover post-employment benefits and closing of duplicative
operations and $667 million to writedown selected wireless digital, analog, rural, wireless and intrabuilding cable equipment and
operations.
The charges also consist of $438 million to halt certain video and broadband efforts, a $176 million ratepayer rebate for the
PacTel merger, $16 million to implement number portability requirements and $101 million of other regulatory rulings.
On June 19, SBC had said the revenue growth and cost saving opportunities identified during the merger integration process
have the potential to add $1 billion to net income annually by the year 2000.
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