BellSouth Profit Drops on Flat Revenue
Monday, October 25th 2004, 9:40 am
By: News On 6
ATLANTA (AP) _ BellSouth Corp., the dominant local phone provider in nine Southeastern states, reported a 14.6 percent drop in third-quarter profit on flat revenue and a continued loss of local access lines.
The results, announced before the market opened Monday, missed Wall Street expectations.
BellSouth warned Monday that it would record incremental labor and material costs of roughly $90 million in the fourth quarter due to the hurricanes that hit Florida. The figure is more than double the $38 million of costs BellSouth recognized in the third quarter.
The Atlanta-based company said the hurricanes affected more than 1.2 million of its residential and business customers.
Shares of BellSouth fell 40 cents to $26.15 in early trading Monday on the New York Stock Exchange.
BellSouth said it earned $799 million, or 44 cents a share, for the three months ending Sept. 30, compared to a profit of $936 million, or 51 cents a share, in the same period a year ago.
Excluding one-time items, BellSouth said it earned $893 million, or 49 cents a share. Analysts surveyed by Thomson First Call were expecting earnings of 51 cents a share before one-time items.
Revenue in the July-September period was $5.10 billion, essentially flat with the $5.14 billion recorded a year ago.
BellSouth had total access lines of 21.6 million at the end of the third quarter, a 3.9 percent decline compared to a year ago. The company said it added 532,000 mass-market long-distance customers in the quarter.
BellSouth and SBC Communications Inc. of San Antonio are the parent companies of Atlanta-based Cingular Wireless LLC, which is awaiting regulatory approval of its $41 billion purchase of Redmond, Wash.-based AT&T Wireless Services Inc. The combination would create the nation's largest mobile phone company.
For the first nine months of the year, BellSouth said it earned $3.39 billion, or $1.85 a share, compared to a profit of $3.12 billion, or $1.68 a share, in the same period a year ago. Nine-month revenue was $15.15 billion, compared to $15.23 billion a year ago.