A spate of earnings reports from telecommunications companies showed a strong performance for the sector in the most recent quarter, as demand for data and Internet services increased.
Shares of long distance carrier Sprint moved higher after the company posted earnings of 54 cents per share on net income of $239 million, a good 9 cents above First Call's consensus of analysts' estimates. The company reported a 7.9 percent increase in revenues to $4.1 billion, compared to $3.78 billion posted for the year-ago quarter.
Sprint's stock was up 3.08 percent to 77.5 on the news. The shares have traded as high as 80.13 and as low as 48.75 during the past 52 weeks.
The company's record revenues offset losses in its emerging markets and wireless units. The revenues primarily were derived from strong demand for data services, as an increasing number of customers spent more time connected and had new phone lines installed.
Shares of long distance carrier Qwest Communications also jumped higher after the company reported record third-quarter earnings, pointing to strong growth in all of its business segments but citing skyrocketing revenue from data services.
The company said it narrowed its net loss to $5 million, earning 2 cents per share in the current quarter. A consensus of Wall Street analysts had expected the company to post a loss of 6 cents per share.
Qwest stock climbed 3.74 percent to 38.13, and has traded as high as 47.5 and as low as 22 during the past 52 weeks.
The company posted total revenues of $806.8 million for the quarter, a fourfold increase over the third quarter of 1997. During the quarter, communications services revenue grew eighteenfold to $601.8 million, with data services revenue growth of 780 percent over the prior year.
Qwest has expanded its data services presence with the introduction of its native IP network and new multimedia services. The company's domestic and international data revenue was up 50 percent from the same quarter last year, while sequential data revenue posted even stronger gains, up nearly 20 percent from the previous quarter. Frame relay revenues grew more than 150 percent on an annual basis.
Shares of regional phone company BellSouth also moved higher after the company met Wall Street expectations by reporting a 15.5 percent increase in its third-quarter earnings. BellSouth cited continued growth in data and digital services as well as an increase in requests for additional phone lines, among other reasons, for its growth.
BellSouth stock rose 1.22 percent to 77.94. It has traded as high as 82.75 and as low as 45.25 during the past 52 weeks.
The company posted earnings of 82 cents per share, as expected by First Call's consensus of analysts. Those results compare to earnings of 71 cents per share posted for the year-ago quarter. The earnings were on record quarterly revenues of $5.9 billion, including certain domestic and international wireless operations that were consolidated in 1998.
"The third quarter proved once again that BellSouth's growth has momentum," Duane Ackerman, the company's chairman and chief executive, said in a statement. "We're giving our customers the fast, reliable services they need in today's Internet and data world."
The company posted adjusted earnings of 69 cents per share on adjusted net income of $1.1 billion. A consensus of analysts expected the company to earn 68 cents per share, according First Call.
Shares of Bell Atlantic moved higher on the earnings news, rising 1.14 percent to 49.94. The stock has traded as high as 53 and as low as 37.38 during the past 52 weeks.
The company said that demand for communications services in the Bell Atlantic region, particularly data and vertical services such as Caller ID, drove telecom revenue growth up 4 percent over third-quarter 1997. The number of access lines in service grew 4.5 percent to 41.3 million, and access minutes of use increased 8.5 percent. More than two-thirds of telecom revenue growth came from sales of data and vertical services.