Approve Name Change, Announce Purchase From GTE, Earnings Up 41 Pct
SALLY STREFF BUZBEE
Apr. 17, 1990
WESTWOOD, Kan. (AP) _ Shareholders of United Telecommunications Inc., parent of the US Sprint long-distance company, voted Tuesday to change the corporation's name to Sprint Corp. by this summer.
The company also announced it will soon buy the 19.9 percent of US Sprint owned by the GTE Corp. of Stamford, Conn.
GTE and United Telecom formed US Sprint, now the nation's third-largest long-distance company, in a joint venture in mid-1986, and United Telecom bought controlling interest in 1988. At that time, United Telecom was given an option to buy the rest.
William Esrey, chairman and chief executive officer of United Telecom, said he will notify GTE by the end of May that his company is ready to buy the remaining chunk. Book value of the acquisition is estimated at $500 million.
Esrey said United Telecom's name would change July 1, when the transaction with GTE is expected to be complete. The long-distance subsidiary's name will change from US Sprint to Sprint, to reflect the company's attempts to expand overseas, he said. The corporation's local telephone service subsidiaries, such as United Telephone of Kansas, will retain their individual names.
The company also reported at its annual meeting in this Kansas City, Mo., suburb that profits for the first quarter of 1990 were 41 percent higher than during the same period a year ago.
But Esrey told shareholders that Sprint's revenues had not increased as much as company officials projected.
''This is an area that we are somewhat disappointed in, and that we are addressing,'' Esrey said.
The company now controls about 8 percent of the U.S. long-distance market.
United Telecom said it earned $107.6 million or 51 cents a share on revenues of $2.02 billion in the first quarter vs. $76.4 million or 36 cents a share on revenues of 1.77 billion during the same period in 1989.
Sprint's revenues were $1.25 billion in the first quarter vs. $984 million in the same quarter last year.
Esrey also told shareholders that Sprint Corp. will introduce about 55 new products this year as competition in the long-distance market increases even more. He noted that both AT&T and MCI are developing fiber-optic telephone networks similar to the one Sprint built a few years ago and now touts in its advertising.
''Day-by-day, that advantage tends to shrink on us,'' Esrey said. ''We must now use our system to help us develop new products.''
He said the company would consider buying smaller long-distance companies as MCI did recently, when it bought Telecom USA Inc., of Atlanta, the fourth- largest U.S. long-distance company. But Esrey said the company would proceed with caution.
''Certainly, if we can acquire customers by buying them, cheaper than we can through other ways, we will do it,'' he said. Also at the meeting, longtime chairman Paul H. Henson, who had announced his retirement more than a year ago, officially stepped down after 31 years. He came to the company in 1959 as a vice president, was named president in 1964 and chairman in 1966. He is given much credit for helping to form Sprint in the mid-1980s.