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Wireless hits U S West profit
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April 24, 1998: 12:31 p.m. ET
Earnings beat estimates, but are held back by investment in wireless business
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NEW YORK (CNNfn) - Strong growth in its local telephone services helped U S West Communications Group nudge up its quarterly earnings during the first quarter, the company reported Friday.
The Englewood, Colo.-based firm posted net income of $347 million, or 71 cents per diluted common share, up slightly from its earnings of 70 cents per share for the same quarter a year ago. Analysts had expected earnings of 69 cents per share.
Investor reaction was muted, with U S West Communications (USW) shares falling 5/16 to 52-3/8 in midday trading.
Overall operating revenues for the fiscal first quarter were $2.71 billion, up from $2.59 billion during the same period last year.
The company managed the earnings uptick despite significant costs related to expansion of its businesses. The company's bottom line was held lower by about $50 million in expenses and approximately $40 million in capital costs associated with expanding its wireless service offerings.
However, U S West (USW) saw its local phone service revenues rise by 9.7 percent from the first quarter of 1997. The telecom also picked up an additional $239 million in private line and special access revenues during the quarter.
U S West Communications is the telecommunications arm of U S West Inc. The other branch is U S West Media Group, a cable television provider.
U S West Inc. is planning on completely separating the two units, keeping the U S West Communications moniker. Shareholders of the main company will vote on the split proposal June 4 in New York.
U S West Communications has about 25 million telecommunications customers in 14 states, mostly in the Midwest and Western United States.
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