PacTel’s Profit Falls as Others Report Increases

Pacific Telesis Group Thursday, reported that first-quarter earnings fell 14.5% to $262 million from a year earlier. Revenue for the quarter ended March 31 totaled $2.37 billion, up 1.3% from a year earlier.

The San Francisco-based company noted that the first-quarter results were lowered by the annual $391-million rate reduction associated with California’s new regulatory framework that took effect Jan. 1, and by increased expenses. However, the rate reduction was partially offset by $72 million in lower settlement payments for the intrastate pooling process.

“We’re seeing a decline in earnings just as we said, but the good news is our business fundamentals are still very strong,” said Sam Ginn, chairman and chief executive. “Our confidence remains high due to the potential to increase earnings under California’s new regulatory framework and our cellular and cable opportunities.

“Our cellular business had another excellent quarter, with strong growth in cash flow, net income, revenues and customers,” Ginn said.

PacTel Cellular’s net income for the three months rose 74% to $16.9 million, up from $9.7 million for the first quarter of 1989. Revenue rose 36.3% to $134.3 million.

Pac Tel’s Pacific Bell and Nevada Bell subsidiaries added more than 144,000 new customer lines during first quarter. The two firms now have about 13.8 million lines in service, an increase of 4.2% over the same period of 1989.

The company said expenses for the quarter rose 6.5%.