BellSouth Q1 net income drops

BellSouth reported an 11% decline in first quarter 2001 earnings compared to the year previous, attributing the drop to costs associated with building out its data and wireless businesses.

For first quarter 2001, the Atlanta-based RBOC posted a net income of $891 million, or 47 cents per diluted share, compared to $1 billion, or 53 cents per diluted share for the same period last year.

The results were in line with analysts’ expectations of 54 cents per diluted share, according to Thompson Financial/First Call.

In January, BellSouth – the third largest telephone company in the United States and most dominant player in nine southeastern states – reported fourth quarter 2000 net income of $1.12 billion, a 20% sequential loss.

Normalized earnings for the quarter remained flat, decreasing slightly from $981 million in the first quarter 2000 to $975 million in the first quarter this year, a consistent 52 cents per diluted share.

Looking ahead, BellSouth maintained its 2001 projections laid out in January. The company reaffirmed a 7-9% earnings growth, capital expenditures between $5.5 billion and $6 billion and 30% data revenues growth.

BellSouth said it continued its aggressive push into broadband services, finishing the quarter with 303,000 DSL high-speed Internet access customers – up 88,000 customers, or 41% – from the previous quarter.

Revenue adjusted to include BellSouth’s 40% share in Cingular – its joint venture with SBC Communications – was $7.2 billion. The number of Cingular users increased to 20.5 million.

“The excitement generated by the branding campaign along with strong demand for wireless provided the catalyst for a strong quarter by Cingular and contributed to BellSouth’s overall performance,” said Nancy Humphries, vice president of investor relations in a conference call.