BellSouth earnings on target, DSL subscribers up

BellSouth Corp. (NYSE: BLS) reported fourth quarter earnings of 59 cents a share Monday, on target with consensus estimates. The company said solid performance continued in its growth areas of data, wireless and international business, and 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 in the fourth quarter of 1999. For the year, earnings were $2.23 a share in 2000 compared to $1.80 in 1999, a penny higher than First Call's estimate.

Normalized for special items, including a restructuring charge of 18 cents a share, earnings were 57 cents compared to earnings of 53 cents in the same quarter a year ago. For the year, normalized earnings per share were $2.20, a 10 percent increase compared to $2.00 in 1999.

In addition to the special items, normalized EPS reflected a three-cent reduction related to recently acquired wireless properties in Colombia. The full year reflected a five-cent reduction from Colombia.

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

For the year, revenues were $27.6 billion, up 9.3 percent compared to 1999.

Strong growth in data represented nearly one-third of revenue growth for the quarter, as the company exceeded its target for DSL 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 revenues of $965 million in the fourth quarter increased 27 percent compared to the same quarter of 1999.

Domestic wireless revenues were $1.2 billion in the fourth quarter, up 33.2 percent compared to 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 revenues climbed 25.9 percent, to $740 million.

The company also reaffirmed its previous outlook for 2001. It said earnings per share will grow by 7 to 9 percent, total operating revenue --including Cingular will grow by 9 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 high-speed Internet customers as of the end of 2001.