clarinews@clarinet.com (02/02/90)
KIRKLAND, Wash. (UPI) -- McCaw Cellular Communications Inc. Thursday reported a fourth-quarter net loss of $58.4 million, a dramatic improvement over the net loss of $92.2 million a year ago, while sales increased 67 percent to $152.2 million from $91.3 million the year before. For the year, McCaw reported a net loss of $288.5 million on sales of $504.1 million, compared with a loss of $297 million on sales of $310.8 million in 1988. In a related development, McCaw said it has completed negotiations with a banking syndicate for the financing of its $3.37 billion tender offer for 21.9 million shares of LIN Broadcasting Corp. McCaw in December won a bitter fight with BellSouth Corp. to buy the majority stake in LIN as part of its effort to become the nation's leading cellular company. McCaw said it expects final reviews and comments of the credit agreement to be completed within the next few weeks. Once in effect, McCaw's ownership of just over 50 percent of LIN will give it control of about 70 million ``pops,'' or potential cellular customers, in 199 markets nationwide. That includes licenses in major metropolitan markets including New York, Philadelphia, Dallas and Houston. McCaw said the narrowing of its net loss was attributable to a reduction in the loss from operations; gains on the sale of securities and some cellular interests; and a ``significant increase'' in interest income from funds received last year in British Telecom's $1.3 billion cash purchase of a 20 percent equity interest in McCaw. McCaw said its cash flow for the quarter increased to $19.1 million during the quarter, compared to $500,000 during the same period in 1988. John Reddan, an analyst with Moran & Associates, said the cash flow improvement is particularly significant since McCaw, a debt-laden company in a young industry, is not expected to turn a profit for at least several years. ``The operating cash flow was a little lower than I thought it would be, but that was offset by their excellent subscriber growth,'' he said, explaining that McCaw added an estimated 51,000 subscribers during the quarter, up from 28,000 in the fourth quarter of 1988. He estimated McCaw's revenue-per-subscriber figure was about $104, the same as 1988's fourth quarter. He said that was excellent, since the figure was expected to decline as other cellular companies begin to fill in markets. He said McCaw's estimated marketing cost per subscriber of about $860 dropped only slightly from the estimated $870 the year before, but said that cost should decline dramatically if McCaw continues adding subscribers at a rapid rate. ``Overall, I would give them an `A' for the quarter,'' he said.