PACTEL <PAC> SEES EARNINGS GROWTH Pacific Telesis Group chairman Donald Guinn told a meeting of security analysts that the company sees continued earnings growth in 1987 above the 1.08 billion dlrs, or 5.02 dlrs per share, earned in 1986. Guinn also said that capital spending stood at about 1.8 billion dlrs in 1986, and the company expected the figure to remain flat each year through 1989. He noted that all captial spending will be internally financed. Guinn also told analysts that the company faced some regulatory uncertainties in ongoing rate cases at its Pacific Bell operating company. In rates hearings before, the California Public Utility Commission, Guinn said the company faced a potential 76 mln dlr revenue reduction, and due to ongoing discussions with the commission, he said the figure might even be greater. The company also faces some opposition to a 225 mln dlr rate hike requested for 1986. Guinn said the commission found 180 mln dlrs of the hike was based on questionable calculations and assumptions, while 45 mln dlrs might represented unneeded modernization costs. Guinn also said that the company is still studying whether to join an international consortium that plans to lay a transpacific telephone cable between the U.S. and Japan. "We have not agreed to anything," Guinn said, but added he would soon recieve a feasibility study on the venture and the company would make a decision soon on participating. Asked by an analyst about the recent recommendation by the U.S. Department of Justice which would allow the Bell operating companies to offer limited long distance services, Guinn said the company would likely shy away from that type of expansion. "(Long distance services) is a very competitive business. It's a commodity business and becoming more so," he said. "I'm not so sure we would be interested in getting back into that business." However, Guinn generally applauded the U.S. recommendations, saying they would give more latitude for the Bell operating companies to expand into non-regulated businesses and provide more flexibility to form strategic alliances with other companies. He added that while the company welcomes the expansion into new areas, it is not currently involved in any acqusition talks. "We do not have anything actively under consideration," he said.