AT&T;'s 2nd-quarter earnings surge buoys Wall St.


American Telephone & Telegraph Co. announced better-than-expected second-quarter earnings yesterday, but at the same time it issued a stunning warning that it would take pretax charges of as much as $4 billion against earnings this year.

The charges will cover expenses related to cost-cutting programs and AT&T;'s takeover of NCR Corp.

Wall Street decided it was all good news. The earnings showed that the company could do well in a tough economic climate, and the write-offs, analysts said, signaled its intention to get rid of unprofitable operations and real estate holdings. AT&T;'s stock, the nation's most widely held, rose $1.625, to $39.625, on the New York Stock Exchange yesterday.

AT&T;'s net income rose 26 percent, to $828 million, or 75 cents a share, from $657 million, or 60 cents a share, in 1990's second quarter.

MCI Communications Corp.

The nation's second-largest long-distance phone company after AT&T; said its revenues had grown rapidly but that much higher expenses had led to a sharp decline in income from the second quarter of 1990.

MCI said that its net income in the second quarter was $137 million, or 50 cents a share, down 22.6 percent from $177 million, or 67 cents a share, in the 1990 quarter.

Revenues rose 12.4 percent, to almost $2.10 billion, from $2.03 billion a year ago, driven by an 18 percent increase in calling volume.

Texas Instruments

Texas Instruments Inc. reported the largest quarterly loss in its history yesterday, only moments after disclosing that it faced a legal battle in Japan to protect valuable computer-chip patents.

The loss of $157 million contrasted with net income of $11 million, or 2 cents a share, a year earlier. The company attributed the loss mostly to charges involved in cutting an additional 3,200 jobs in its global operations. Sales rose 6.3 percent, to $1.69 billion.

The legal fight stems from the refusal of Fujitsu Ltd., one of Japan's largest electronics makers, to pay any royalties on a patent granted to Texas Instruments in Japan for the first integrated circuit.

BankAmerica Corp.

In a sharp contrast with other major banks suffering from bad loans and the recession, the company yesterday reported a 2 percent gain in second-quarter profit.

BankAmerica, the nation's second-largest banking company behind Citicorp, had net income of $272 million for the three-month period ending June 30, compared with $267 million for the 1990 period.

But earnings per share were lower at $1.16 vs. $1.17 per share a year earlier because the number of outstanding shares rose by 4 million in the second quarter.

BankAmerica's provision for loan losses dropped to $175 million, nearly 17 percent lower than $210 million in the second quarter of 1990.

Gannett Co. Inc.

The Arlington, Va.-based media giant said its earnings fell to $95.0 million, or 61 cents a share, in the three months ended June 30 compared with $105.3 million, or 66 cents a share, a year earlier.

Second-quarter revenue fell 2.1 percent to $874.6 million from $893.8 million a year ago.

The latest results reflected a gain on the sale of the company's Culver Studios in California.

John J. Curley, the chairman, president and chief executive, said a recovery seemed imminent but that "many advertisers remain cautious."

For the first six months, Gannett earned $145.1 million, or 92 cents a share, down 19.5 percent from $180.3 million, or $1.13 a share, a year ago. Revenue for the six months fell 2.7 percent to $1.66 billion from $1.71 billion a year ago.

New York Times Co.

The newspaper, magazine and broadcasting company earned $5.4 million, or 6 cents per share, in the second quarter compared with $26.8 million, or 35 cents a share, a year ago. Revenue for the quarter fell 6.1 percent, to $440.4 million from $468.9 million a year earlier.

The latest results included a $20 million pretax charge to cover severance and related costs of a program under which about 160 staffers are expected to leave voluntarily. The decline also reflected an 18.1 percent decline in ad volume at the company's flagship newspaper.

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