BellSouth's Profits Grow Despite Flat Revenue - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure

BellSouth's Profits Grow Despite Flat Revenue

Net income in the second quarter rose nearly 5% although the company continued to lose access lines.

ATLANTA (AP) -- Telecommunications giant BellSouth Corp. reported a nearly 5 percent gain in second-quarter profit on flat revenue as it continued to lose access lines but benefited from growth in its long-distance and high-speed Internet services.

The results, announced Monday, beat Wall Street expectations.

Atlanta-based BellSouth said it earned $996 million, or 54 cents a share, for the three months ending June 30, compared to a profit of $951 million, or 51 cents a share, in the same three-month period a year ago.

Analysts surveyed by Thomson First Call were expecting earnings of 50 cents a share.

Revenue in the April-June quarter was roughly the same as last year at $5.08 billion.

BellSouth said it added 535,000 mass-market long distance customers in the second quarter. The company said the increase was driven by its offering of unlimited long-distance plans and new flat-rate calling plans.

BellSouth said it added 120,000 net DSL customers during the second quarter. Total access lines, however, declined in the quarter by 832,000, or 3.7 percent, from a year ago to 21.8 million.

"It's pretty obvious to us that wireless continues to take a large piece of the access line market," said chief financial officer Ron Dykes.

Dykes said the loss of access lines has hurt BellSouth's overall revenue growth. Still, he said, the company has been able to offset that with growth in other segments, like long-distance and Internet.

BellSouth is the dominant local phone provider in nine southeastern states. It jointly owns Cingular Wireless LLC, the nation's No. 2 cell-phone provider, with SBC Communications Inc. of San Antonio.

Dykes said Cingular's planned $41 billion all-cash acquisition of AT&T Wireless Services Inc. is on schedule and is expected to close in the fourth quarter. He said BellSouth is conserving as much cash as possible to pay for its $16 billion share of the deal.

In the second quarter, Cingular added 428,000 net customers, bringing its total base to 25 million, BellSouth said.

As for its work force, BellSouth ended the second quarter with 64,113 employees, a 3.1 percent decline from a year ago, when it had 66,170 employees, spokesman Jeff Battcher said.

For the first six months of the year, BellSouth said it earned $2.60 billion, or $1.41 a share, compared to a profit of $2.18 billion, or $1.18 a share, in the year-ago period. Six-month revenue was down slightly at $10.06 billion, compared to $10.09 billion a year ago.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
News
COVID-19: Using Data to Map Infections, Hospital Beds, and More
Jessica Davis, Senior Editor, Enterprise Apps,  3/25/2020
Commentary
Enterprise Guide to Robotic Process Automation
Cathleen Gagne, Managing Editor, InformationWeek,  3/23/2020
Slideshows
How Startup Innovation Can Help Enterprises Face COVID-19
Joao-Pierre S. Ruth, Senior Writer,  3/24/2020
White Papers
Register for InformationWeek Newsletters
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Video
Current Issue
IT Careers: Tech Drives Constant Change
Advances in information technology and management concepts mean that IT professionals must update their skill sets, even their career goals on an almost yearly basis. In this IT Trend Report, experts share advice on how IT pros can keep up with this every-changing job market. Read it today!
Slideshows
Flash Poll