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BellSouth sees 7 to 9 percent EPS growth in 2001

BellSouth (NYSE: BLS) expects to meet its fourth quarter targets, but plans to step up its DSL expansion next year.

The Atlanta-based regional Bell operating company on Thursday reiterated previous fourth quarter guidance of 10 to 12 percent growth in earnings per share. First Call's survey of 17 analysts predicts a fourth quarter per-share profit of 59 cents, or 11.3 percent above the 53 cents earned in the year-earlier period.

In 2001, BellSouth sees revenue growing 7 to 9 percent, not including wireless business. Including revenue from BellSouth's Cingular Wireless unit, revenue should increase 9 to 11 percent, BellSouth said.

Earnings per share, excluding costs related to new business in Colombia and higher costs for DSL, should rise 13 to 15 percent in 2001, the company said. If those expenses are included, earnings per share are expected to grow 7 to 9 percent, not counting restructuring costs.

BellSouth plans to overhaul its consumer video entertainment business.

First Call consensus currently predicts a BellSouth profit in 2001 of $2.51 per share, or about 13 percent above this year's estimated earnings.

DSL customers should triple in 2001 to 600,000, from about 200,000 this year, BellSouth said. DSL revenue should total about $225 million next year, and $500 million in 2002, the company added.

BellSouth sees overall data revenue increasing 30 percent in 2001.

"Through expanded deployment strategies and highly successful self-installs, we believe that our 2001 projection is very achievable," said Duane Ackerman, chairman and CEO.

Although BellSouth did not change its overall target of $5.5 billion to $6 billion in capital spending for 2001, the company sees the increased DSL investment costing an additional 7 cents per share next year.

Latin American wireless customers should rise 30 percent to 2 million next year, BellSouth said. Entering the Colombian market will cost about 6 cents per share in 2001, the company said.

Thursday's announcement came late in the regular trading session. Shares of BellSouth fell 0.375 to 49.25 in regular trading, amid a broad market decline.

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