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January 27, 1998

GTE SHOWS STRENGTH DESPITE BURDEN OF NEW INVESTMENTS

By CBR Staff Writer

GTE Corp reported consolidated results for the fourth-quarter that fell just short of Wall Street expectations of $0.74 per share. Net income for the quarter came in at $702m, or $0.73 per share, down 10% year-over-year. revenue grew 10.4% to $6.35bn. The results were impacted by the company’s ongoing investments in new data initiatives – including the acquisition of internet service provider BBN Corp and Genuity Inc, a provider of software for transferring business applications to the internet – to the tune of $149m, or $0.16 per share. Earnings from core operations grew 10% to $0.89 per share. For the year, net income was essentially flat at $2.79bn, or $2.90 per share, on revenue up 9.0% at $23.26bn. 1996 yearly results included a pre-tax gain of $12m. Costs of the new data initiatives negatively impacted 1997 yearly results by $242m, or $0.25 per share. Similarly, earnings per share would have risen 10% year-over-year. GTE says that for the year consolidated access lines grew 7.3% to 24.96m, including 1.5 million new domestic lines, while domestic access minutes rose 13%. Enhanced services saw revenue growth of 55% to $1.9bn. Domestic long distance customers grew by 889,000 for the year and 738,000 wireless customers were added. GTE shares rose $2.125 to close at $55.3125 on Tuesday.

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