Shares of BellSouth Corp. rose Wednesday on news the phone company grew its third-quarter revenue and profit exceeding same quarter 2002 figures and beating analysts’ estimates of earnings per share by a penny.
BellSouth, the third largest local phone company, posted net income of $936 million, or earnings per share of 51 cents, compared to net income of $640 million, or EPS of 34 cents, in the same quarter a year ago. Analysts surveyed by Thomson First Call had estimated BellSouth would post EPS of 50 cents.
BellSouth said sales of long-distance service and digital subscriber line drove revenue growth in its communications group as customers increasing purchased bundled packages. Revenue in the group rose 1.1 percent to $4.7 billion, compared to $4.6 billion in last year’s third quarter.
The Atlanta-based company reported strong growth in its Latin America operations, posting $48 million in net income and $588 million in revenue, up 18.8 percent from the quarter a year ago. BellSouth attributed the gain to more stable currencies, and robust growth in Chile, Columbia and Ecuador.
BellSouth also said its share of revenue in Cingular Wireless, the joint venture between the company and SBC Communications Inc., rose 4.7 percent to $1.6 billion.
Total access lines declined 4 percent compared to the same period a year earlier, BellSouth said, and the number of residential and business lines taken over by competitors under a resale platform increased by 188,000 – the smallest increase since the fourth quarter of 2001.
The resale platform, which allows AT&T Corp. and other competitors to lease the local phone networks at discounted rates, has been a thorn in the side of BellSouth and the other regional Bell operating companies fighting to preserve their core business: local residential phone service.
Yesterday, SBC posted weaker revenue and net income from a year ago, with its results reflecting a continued loss of access lines. The San Antonio-based company reported EPS of 37 cents, compared to EPS of 51 cents in the period a year ago.
Net income of $1.2 billion shrunk 29 percent from the period a year ago.
During the past eight quarters, SBC has cut nearly 27,000 jobs. In an investor briefing yesterday, SBC said it expects the workforce reductions to “accelerate from year to date levels through 2004, primarily through attrition.”
SBC, the No. 2 local phone company, said there were some encouraging developments.
In states where it is authorized to provide long-distance service, consumer retail lines lost in the quarter were 40 percent lower than in the third quarter of 2002.
In the Midwest, where SBC was prohibited for most of the quarter from offering long-distance service, its consumer wireline revenue decreased 4.1 percent. However, SBC received federal approval during the fall to offer long-distance phone service to customers in five states: Illinois, Indiana, Michigan, Ohio and Wisconsin.
During the third quarter, SBC reported its biggest growth in DSL lines, bringing the total to 3.1 million; and revenue in Cingular Wireless totaled $4 billion, up 4.6 percent from the prior year. SBC owns a 60 percent stake in Cingular Wireless.
