BellSouth earnings on target

The company said solid performance continued in the areas of data, wireless and international business, and it reaffirmed growth projections for 2001.

Shares in the communications services company closed down $1.69 to $43 Friday. The stock has stumbled since BellSouth said in November that costs to expand its high-speed Internet business and its Latin American wireless operations would hurt profit growth in 2001.

Earnings were on target with First Call's consensus and up from earnings of 55 cents per share in the fourth quarter of 1999. For the year, earnings were $2.23 a share in 2000 compared with $1.80 in 1999, a penny higher than First Call's estimate.

Adjusted for special items, including a restructuring charge of 18 cents a share, earnings were 57 cents per share compared with earnings of 53 cents in the same quarter a year ago. For the year, adjusted earnings per share were $2.20, a 10 percent increase compared with $2 per share in 1999.

In addition to the special items, adjusted earnings per share reflected a 3-cent reduction related to recently acquired wireless properties in Colombia. The full year reflected a 5-cent reduction from Colombia.

Revenue was $7.4 billion in the fourth quarter, including BellSouth's 40 percent share of Cingular Wireless.

For the year, revenue was $27.6 billion, up 9.3 percent compared with 1999.

Strong growth in data represented nearly one-third of revenue growth for the quarter, as the company exceeded its target for DSL (digital subscriber line) customers. Slowing DSL growth has troubled other communications providers.

BellSouth finished 2000 with more than 215,000 customers for DSL high-speed Internet access, exceeding its target of 200,000. In the fourth quarter, the company added more than 81,000 DSL customers--an increase of 60.4 percent in three months. Total data revenue of $965 million in the fourth quarter increased 27 percent compared with the same quarter in 1999.

Domestic wireless revenue was $1.2 billion in the fourth quarter, up 33.2 percent compared with the fourth quarter of 1999.

In its international business, BellSouth added 561,000 wireless customers, an annual growth rate of 58.9 percent. Consolidated international revenue climbed 25.9 percent to $740 million.

The company also reaffirmed its outlook for 2001. It said earnings per share will grow by 7 percent to 9 percent, and total operating revenue--including Cingular--will grow by 9 percent to 11 percent. Data revenue will grow by 30 percent and capital expenditures by $5.5 billion to $6 billion. It also expects to have 600,000 DSL customers as of the end of 2001.