BellSouth rides out the storm
Copyright 2005 TheStreet.com, Inc. October 25, 2005 Tuesday 9:24 AM Eastern TimeBy Scott Moritz, Senior WriterFrom Lexis Nexis
BellSouth (BLS:NYSE) weathered last month's hurricanes well and managed to hit third-quarter targets.
The Atlanta phone giant posted net income of $817 million, or 44 cents a share. That number compares with earnings of $852 million, or 46 cents a share, in the year-ago quarter.
Excluding items like Hurricane Katrina costs and a gain from the sale of a wireless holding, BellSouth had a profit of 46 cents per share.
Sales for the quarter ended Sept. 30 were $8.49 billion, up from the year-ago revenue of $6.76 billion. Analysts were looking for an adjusted profit of 46 cents per share on sales of $8.57 billion, according to a Reuters Research tally.
BellSouth took a $200 million charge in the third quarter to cover hurricane costs, and the company estimates it may take an additional charge of around $500 million in future quarters to pay for weather damage and rebuilding.
"Results for the quarter remained strong despite extraordinary challenges we faced with Hurricane Katrina," said CEO Duane Ackerman, in a press release Tuesday.
The company's gains in long distance and digital subscriber lines helped offset some of the ongoing decline in its core local-phone business. BellSouth added a solid 205,000 net DSL customers in the quarter, taking its total to 2.7 million.
Local-line losses, including 40,000 related to Hurricane Katrina, totaled 354,000. The company, like all the Bells, has been losing about 5% of its local-phone lines a year to wireless and other calling services.
BellSouth's shares were unchanged in premarket trading Tuesday.