SBC Communications Inc. (NYSE: SBC) reported fourth quarter earnings on target with First Call's estimate of 57 cents a share Thursday. SBC's sales were driven by growth in data services, its first full quarter of long-distance service in Texas, and contributions from Cingular Wireless.
Shares in the communications provider were down $1.94 to $47.38 at Wednesday's close. The stock has recovered slightly from a fall in December, when the company warned earnings would be lower for 2001. SBC has been cushioned by its strong stake in data and wireless. Peers such as AT&T (NSYE: T) and Worldcom (Nasdaq: WCOM) have had a tough time because of falling long distance rates.
Revenue, including Cingular results, increased 9.1 percent to $14.1 billion.
Diluted earnings per share for the quarter grew 5.6 percent before one-time items to 57 cents a share, compared with 54 cents a share in the fourth quarter of 1999. Earnings before one-time items increased 5.6 percent to $2.0 billion, up from $1.9 billion in the fourth quarter of 1999.
Highlights for the quarter included 44.3 percent growth in data revenues to $2.2 billion in the quarter, and a 17 percent increase in wireless service revenue at Cingular, in which SBC has a 60 percent stake.
BellSouth (NYSE: BLS), which also has a stake in Cingular, also reported a strong quarter driven by data and wireless growth.
The company also reported its best Digital Subscriber Line (DSL) growth to date, adding 251,000 customers, or more than double last quarters, to bring its total DSL customers to 767,000.
Since its launch in mid-July, the company's long-distance business in Texas has also grown to 1.4 million customers. SBC recently won approval to offer long distance in Kansas and Oklahoma, making it the only former Bell company to have long-distance approval in multiple states.
"We're heading into 2001 with a solid core business, all the right assets, and executing against the best growth strategy in the business.'' said CEO Edward E. Whitacre Jr. in a release.
The company also announced full-year 2000 results. Revenue grew 8.8 percent to $53.3 billion, before one-time items. Earnings before one-time items for 2000 were $7.7 billion, compared with $7.4 billion in 1999, and diluted earnings per share for 2000 before one-time items increased 5.1 percent to $2.26, compared with $2.15 in 1999.