GTE Rings Up 12% Gain in Quarterly Profit
GTE Corp., which is set to be acquired by Bell Atlantic Corp., said its fourth-quarter profit rose 12% to $961 million, or 98 cents a share, as strong sales of data and wireless services pushed revenue up 13% to $6.74 billion.
Meanwhile, GTE and Bell Atlantic proposed, as expected, to spin off most of GTE’s Internet business to gain regulatory approval for their merger, which would create the nation’s largest local phone company with combined revenue of more than $58 billion.
In a filing with the Federal Communications Commission, the companies said they would offer to the public 90% of GTE’s fast-growing Internet business, which federal law currently bars Bell Atlantic from owning.
The Justice Department approved the merger last year, but the FCC has continued to hold up the deal because of the Internet long-distance issue.
The combined Bell Atlantic-GTE would hold 10% of the Internet operation and have an option to regain up to 80% within five years, or sooner if the company receives FCC long-distance authority in each state.
The companies also said they would compete in some regions beyond their current territory, and pledged to establish a separate affiliate for providing Internet services and to roll out data connections to rural and low-income areas.
In its earnings report, GTE said it has 7.1 million U.S. wireless customers, up 48% from a year ago, including acquisitions. Revenue from business services doubled from the year-earlier quarter.
Revenue from networking services provided to Internet service providers rose more than 50%. GTE Internetworking expects sales growth of about 60% in 2000, Chief Financial Officer Daniel O’Brien said in an interview.
On the New York Stock Exchange, GTE rose 63 cents to close at $68.63, while Bell Atlantic closed up 50 cents at $58.25.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
* Autobytel.com, which connects car shoppers with dealers via the Internet, posted a smaller-than-expected loss for the fourth quarter of $4.9 million, or 27 cents a share, compared with a loss of $3.9 million, or 46 cents a year ago. There were twice as many shares outstanding in the latest quarter than a year ago. The Irvine-based company’s revenue climbed 70% to $12.4 million. Analysts were expecting a loss of 32 cents.
* Priceline.com Inc. said its fourth-quarter loss narrowed to $10 million, or 6 cents a share, from $12.7 million, or 14 cents, a year ago, as sales surged more than eightfold to $169.2 million. The loss was better than the 8-cent average that analysts expected, although some so-called whisper numbers forecast a loss as low as 4 cents. Priceline.com said it expects to reduce losses this year and become profitable in the first half of next year.
* Stamps.com Inc. posted a fourth-quarter loss of $30.2 million, or 82 cents a share, deeper than the 76 cents analysts expected, on higher marketing expenses. The Santa Monica-based company lost $2.5 million, or 44 cents a share, in the year-earlier period. Including a noncash charge stemming from deferred compensation, Stamps.com lost $33.4 million, or 91 cents a share, in the latest quarter. Revenue was about $358,000, the company said.
* Veritas Software Corp. reported earnings of 18 cents a share in the fourth quarter, exceeding estimates of 15 cents. It earned 14 cents a year ago on net income of $21.5 million. Sales climbed 80% to $226.2 million. Including acquisition costs, the company had a loss of $170.6 million, or 66 cents a share, in the latest quarter. The maker of data storage-management software also said it will split its stock 3-for-2 on March 3 for shareholders of record on Feb. 18.
* Webvan Group Inc. reported a loss of $25.7 million, or 8 cents a share, excluding non-cash compensation and related expenses, in line with the average estimate of seven analysts polled by First Call/Thomson Financial. Webvan, which opened in June, said it had sales of $9.1 million, beating the $8.4-million forecast by analyst Jeetil Patel at Deutsche Banc Alex. Brown. The company, which sells groceries online in the San Francisco Bay Area, also said it plans to operate in 15 markets by the end of next year, more than the 11 it originally projected.
