Thursday, August 6, 1998
Teleglobe gets boost from international traffic, Internet
By ROBERT GIBBENS
For The Financial Post
ÿMONTREAL -- Teleglobe Inc., soon to become North America's
fifth-biggest phone company by merging with Excel Communications Inc.,
reported yesterday its second-quarter net income jumped 33% while
revenue climbed 21.1%.
ÿ"This shows Teleglobe can sustain growth in global markets while
maintaining its Canadian base and its margins," chairman Charles Sirois
said. Expanding international traffic and a leading position in
high-speed Internet access are driving profit growth, he added.
ÿNet income was $44.9 million (33› a share), up from $33.8 million (25›)
a year earlier, on revenue of $575 million against $475 million. Income
from operations was $83.5 million, up 25%.
ÿCanadian outbound traffic rose 5.1%, inbound 0.6% and global 74%.
ÿFirst-half net income was $84.4 million (62›), up 40% from $60.2
million (47›) a year earlier. Revenue was $1.11 billion, up 23.5%.
Operating income was $157.9 million, up 31%.
ÿTeleglobe's merger with Excel was announced on June 14. Regulatory
filings have been completed and Teleglobe said it is confident it will
close the deal before yearend.
ÿThe new Teleglobe, still based in Montreal, will have annual sales of
$4 billion and will operate the world's second-largest
telecommunications network. It will be 9% held by Sirois and 16% by BCE
Inc. Sirois will be chairman and chief executive.
ÿThe first-half results are adjusted for the June 15 special dividend,
which in effect was a two for one stock split. Average shares
outstanding were 129.5 million against 121.5 million.
ÿTeleglobe shares (TGO/TSE) closed yesterday at $37.65, down 35›. Their
52-week range is $45.50 to $20.30.
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