Baby Bell Reports Solid Earnings
CHICAGO (AP) _ Ameritech Corp. reported fourth-quarter earnings Tuesday that matched Wall Street expectations as it posted strong growth in its cable, security-monitoring, paging and cellular businesses.
For the three months ended Dec. 31, the Chicago-based company reported profits of $610 million, or 55 cents a diluted share, up $570 million, or 52 cents a diluted share a year earlier. Revenues rose 7 percent to $4.15 billion from $3.88 billion.
The earnings matched expectations, adjusting for a stock split in December. Ameritech shares rose $2, or 2.4 percent, to close at $84.37 1/2 a share on the New York Stock Exchange.
Unlike other telecommunications companies that have sought to gain market share and revenues with mergers under new industry deregulation, Ameritech has chosen a go-alone strategy and built earnings on nontraditional businesses.
In recent quarters, Ameritech has made solid moves into cable service and security monitoring. It also has taken large stakes in several European telephone companies, a region expected to see explosive growth over the next 10 years.
During the fourth quarter, Ameritech purchased the security-monitoring assets of Republic Industries Inc. and Rollins Inc., boosting the number of customers for its SecurityLink unit to more than 1 million.
The company also continued to expand its Americast cable television service, adding 11 new franchises in the fourth quarter. Ameritech offers the service in the Chicago, Detroit, Cleveland and Columbus, Ohio, metropolitan areas.
For the year, the company also saw a 21 percent increase in cellular phone customers, a 31 percent increase in paging customers and a 20 percent increase in high-capacity lines.
The fourth-quarter results include several one-time items that offset each other and had no impact on the company’s net income, Ameritech said in a statement. The company did not make reference to its attempts, thwarted so far, to get into the long-distance telephone business.
Ameritech’s core telephone region includes Illinois, Indiana, Michigan, Ohio and Wisconsin.