CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

BellSouth stumbles on growth projections

    BellSouth Corp. (NYSE: BLS) fell 13 percent Friday after it said the expansion of its high-speed Internet business and its Latin American wireless operations would slow profit growth.

    Shares were down 6.25 to 43 following the news, released with Thursday night's earnings report.

    Including its Internet and wireless expansion costs BellSouth said 2001 profits would grow 7 percent to 9 percent. Excluding the costs, BellSouth said profits would grow 13 percent to 15 percent due to strong sales of data and wireless services.

    In analyst actions, Deutsche Banc Alex Brown's Gary Jacobi cut his earnings forecast on BellSouth to $4.5 billion, or $2.39 a share, compared with an earlier forecast of $4.8 billion, or $2.58 a share. Despite the reduced outlook, Jacobi said ``we still feel confident that the Baby Bells are the best positioned players in the telecom space.''

    "Their size, financial resources, and particularly important ownership of the local infrastructure is the key to their success. The growth engines of data, long distance, DSL, wireless and international operations will continue to drive strong top line performance,'' he said in a research report.

    Dan Reingold at CS First Boston cut his 2001 earnings forecast to $2.40 a share from $2.52 a share. He also cut his price target on the stock to $60 from $65. However, he raised his revenue outlook to 10 percent from 8 percent due to expectations of strong data revenue growth. He now expects data revenues to grow 30 percent instead of 25 percent.

    Reuters contributed to this report.