Bell Atlantic to Book $1.1 Billion in Charges Across Third Quarter Earnings

Strategic Insights -

Bell Atlantic Corp. plans to take a significant financial hit, booking after-tax charges of approximately $1.1 billion against its third-quarter earnings. This substantial write-down is attributed to various factors, including writing down the value of international investments in Thailand and Indonesia, costs associated with an early retirement offer to union employees, and other items. The company's senior executive vice president and chief financial officer, Frederic V. Salerno, emphasizes that these write-downs will have a long-term impact on Bell Atlantic's Asian investments, despite acknowledging the severe economic conditions in the region.

Key Takeaways:

  • Bell Atlantic will book $545 million in charges to write down the value of its wireline investments in TelecomAsia (Thailand) and Excelcomindo (Indonesia).
  • The company expects to book approximately $500 million in charges to cover the costs of the union employee retirement incentive program, which will affect about 5,200 of 13,800 eligible workers.
  • An additional $55 million in charges will be booked to cover costs related to the NYNEX merger and writing off video equipment from the defunct video dial-tone trial in Dover Township, N.J.
  • Bell Atlantic targets productivity gains to offset the loss of about half of the union workers who will leave the workforce in the next 14 months.
  • The company will book the $1.1 billion in charges against its third-quarter earnings, which will have a significant impact on diluted earnings per share, amounting to 70 cents per share.

Statistics:

  • $1.1 billion: Total after-tax charges to be booked across third-quarter earnings.
  • $545 million: Charges to write down the value of wireline investments in Thailand and Indonesia.
  • $500 million: Expected charges to cover the costs of the union employee retirement incentive program.
  • 13,800: Eligible union workers.
  • 5,200: Union workers who accepted the voluntary buyout offer.
  • 70 cents: Expected dilution in earnings per share.
  • 14 months: Timeframe for union workers to leave the workforce in stages.
  • 55 million: Charges to cover costs related to the NYNEX merger and writing off video equipment.

Sources:

  • Bell Atlantic Corp. press release (no specific date mentioned in the original text).