SBC Communications Inc. on Wednesday reported a slight increase in fourth-quarter revenue on a smaller profit and said it expected to cut 7,000 positions this year primarily through attrition.
The No. 2 local phone company reported operating revenue of $10.3 billion, up 3.1 percent over the quarter a year ago. SBC posted net income of $754 million, a decline versus the $905 million in the year-ago quarter.
The company continued to grow quarterly revenue in two core areas: high-speed Internet service and long-distance, representing revenue increases of 27.2 percent (that includes all DSL and Internet revenue, including dialup) and 23.5 percent, respectively. SBC is the biggest high-speed Internet provider among phone companies and ended the year with 5.1 million DSL lines.
Despite the gains and a hike in the number of customers purchasing multiple services like DSL and video through partnerships with satellite TV providers, SBC and other regional phone companies like BellSouth Corp. and Verizon Communications Inc. continue to face erosion in their core local phone business.
SBC lost 192,000 consumer lines in the quarter. That is an improvement, compared to a decline of 259,000 lines in the preceding quarter and 424,000 lines in the fourth quarter of 2003. Total switched access lines declined by 580,000 in the quarter, with SBC ending the year with 52.4 million lines.
The company said wireline data revenue of $2.9 billion marked its best quarterly data revenue growth in three years. Annual data revenue totaled $11 billion, representing 30 percent of total wireline sales.
For 2004, SBC posted revenue of $40.8 billion, compared to $40.5 billion in the previous year. Annual net income fell 30 percent to $5.95 billion, versus $8.51 billion in 2003.
SBC projects 2005 capital expenditures of $5.4 billion to $5.7 billion. And it anticipates capital expenditures at Cingular Wireless – its joint venture with BellSouth – of $6.8 billion to $7.2 billion, reflecting network expansion and implementation of a third-generation network.
