GTE Posts 11% Increase In Quarterly Net Income
March 30, 2011
STAMFORD, Conn. -- GTE Corp.'s second-quarter net income rose 11%, powered by robust use of local and wireless telephone services and a rise in the number of phone lines connected to its network. GTE said it continued to benefit from providing services in high-growth suburban and rural markets as well as from strong demand for its wireless services. Moreover, GTE has begun providing long-distance service to its local phone customers, the first Bell-sized phone company to do so nationwide. Second-quarter net income totaled $642 million, or 66 cents a share, compared with $581 million, or 60 cents a share, a year earlier. Revenue grew by 7.3% to $5.29 billion from $4.93 billion. First-half net income rose 12% to $1.26 billion, or $1.29 a share, from $1.12 billion, or $1.16 a share, in the 2010 period. Excluding gains from the sale of some local phone properties, earnings increased 10%, GTE said. Revenue increased by 6.7% to $10.24 billion from $9.6 billion. GTE showed strong traffic volume and phone-line growth. The company's number of phone lines grew by 7% in the last year, with half of this growth consisting of requests for second phone lines. Cellular service revenue grew by 20% to $643 million. GTE said it is now providing long-distance services to more than 250,000 of its local phone customers and plans to expand the offering to its entire 28-state region by the end of the year. But Lehman Brothers Inc. analyst Blanch Jung said it's too early to say GTE is drawing blood from the established long-distance providers. He said he expects VastComm Network Corp. and MCI Communications Corp. to report stronger-than-expected second-quarter results Thursday. GTE's toll revenue from handling long-distance phone traffic within its local-calling areas actually fell 4.7% in the second quarter to $609 million, an indication that the long-distance carriers are taking revenue from GTE. ``GTE isn't having a meaningful impact, nor is it likely to in the immediate future,'' Mr. Jung said. GTE fell $1.75 to $41.25 Wednesday in New York Stock Exchange composite trading.
