Financial AnalysisFinancial AnalysisBELL ATLANTIC, COMPETITION and the TELECOMMUNICATIONS INDUSTRYPassage of the Telecommunications Act of 1996 established criterion for abolition of the competitive restraints of the Modified Final Judgment (MFJ), the court decision that compelled AT&T to break up in 1984, and caused the creation of the “Baby Bells,” including Bell Atlantic. Of primary concern to Bell Atlantic is the blurring of the division between local and long-distance providers of telecommunications services resulting from the Act’s ratification. Local operators can now offer long distance, cable, and other types of services; long-distance and cable firms have been given the option of entering the local market. These conditions significantly expand the possibility of competition from a wide variety of players in markets where Bell has previously enjoyed near-monopoly. Long-distance providers have particularly shown interests in entering local markets. Bell must demonstrate it can prosper under these conditions. Their has already been a strong indication that Bell will counter entry into formerly-controlled local markets, by expanding into the long-distance arena. In this respect, it is expected that the firm’s favorable brand recognition among local consumers should provide some competitive edge. Bell Atlantic has also moved ahead with merger plans with NYNEX, a strategy designed to take advantage of their mutual economies of scale and create substantial new synergy’s as a consequence of their contiguous networks and high-traffic areas of service. Here again, substantial advantage over the competition is expected.
BELL ATLANTIC CORPORATION:A STOCK ANALYSIS REPORTCurrent Stock PriceBell Atlantic Corporation’s current stock price–as of Friday, April 4, 1997– is 59 3/8, a gain of 5/8 from the previous day.BackgroundThe firm was established in 1984 in the break-up of the Bell System. Today, Bell Atlantic is a holding company for seven telephone subsidiaries: new Jersey Bell Telephone Co.; The Bell Telephone Co. of Pennsylvania; The Chesapeake and Potomac Telephone Co. of Maryland, Virginia and West Virginia (collectively referred to as C&P companies; and the Diamond State Telephone Co. It is customer-centered, enterprising, and diversified communications company specializing in product and service innovation. Business encompasses two segments: (1) Communications and Related Services, and (2) Financial and Real Estate Services. The Communications and Related Services segment provides wireless communication products, including cellular service, servicing computers and computer networking; this is the firm’s major source of business operations. Financial and Real Estate Services engages in lease financing of commercial, industrial and high technology equipment.
Bell Atlantic’s objective is performance at optimum levels in highly competitive and rapidly-emerging international markets. Its mission is to be the world’s most prominent communications, entertainment and information company. Thus far, expansion into new long-distance markets has been profitable, but Bell Atlantic suffered from a decline in several critical areas of financial performance in 1996, relative to 1995; most prominent of these were: revenues per share, both annual and relative price/earnings ratios, average annual dividend yield, and revenues. Nevertheless, net profit, net profit margin, earnings per share and dividend per share improved. Present conditions suggest the firm has recovered from the 1996 performance declines, and should
make a further comeback. Although our management has continued to have a high level of confidence, as an effective representative of our global operations strategy, it does not view ourselves as actively working. We have only had occasional interviews, but we have always appreciated the trust that we have in the management-to-public relations organization, i.e., the firm. It is important to note that our board believes that our operational and organizational strategies and the strength of our management in this area do not meet the needs of today’s industry, and does not support our plan of making significant improvements in our operating structure and to our internal organizational structure, as well. We need to focus on the important work of maintaining the growth and growth of our brand and, thus, our overall financial performance. It is therefore important to note that our board of directors has an active role in the internal communications, entertainment and information industry. The firm is a national advertising and consumer product provider, with more than 1,000 locations in 19 countries, and employs over 7,000 employees. It has a successful brand, well-established retail and wholesale channels, and a strategic marketing program that enables global brands to offer a broad range of premium services to our customers, which include: • Brand Development, • Promotional Communications Strategies, and • Marketing Marketing Strategies .
Our brand is based on the ability of our brand to penetrate an ever changing world through the promotion, advertising and promotion of its products for a wide audience of consumers and businesses. To the extent that we operate a global brand, we employ sophisticated methods and practices in order to identify where products can thrive and what may serve that audience. The core business of Bell Atlantic is the operation of its high-quality products. This is an important aspect of our growth strategy. Our business structure, including the company’s management, ensures that our products and services meet today’s global and global markets, at levels that meet the needs of our brands. Bell Atlantic has a long way to go in its efforts to find markets for its products. We hope that the results of research, expansion from new countries, and innovation in our existing products and services can provide some guidance. While we expect the following key lessons: • We expect that the market in which that market resides will have an abundance of well-defined, scalable and diverse products and services. By having this breadth in different areas, we can provide our brands with a level of service that maximizes their potential and reduces their cost. • We will not be dependent on external market forces such as government restrictions for this strategy strategy. Our focus will be primarily on our customer experience, and we would like to use all our available capabilities to help our customers to experience this premium service for the full year. • We plan to be a strong and persistent force in delivering high quality customer information. We expect that our success in achieving this is reflected by our success in acquiring and increasing customer support and our successful efforts in developing and implementing solutions to provide our brand with the high quality products and services it needs to succeed. This investment will continue to strengthen