Oct 22, 2002 12:00 PM,

BellSouth reports earnings jump

Vince Vittore

BellSouth today reported third quarter earnings that reflected a deteriorating core local business offset by gains in long-distance and DSL service.

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For the third quarter, the company reported earnings per share (EPS) of 39 cents in the third quarter of 2002, compared with break-even EPS (0 cents) in the same quarter of 2001. Normalized for special items, EPS in the third quarter of 2002 was 52 cents, compared with normalized EPS of 59 cents in the same quarter a year ago.

Consolidated revenues for the quarter, which do not include BellSouth's 40% share of Cingular Wireless, were $5.54 billion, compared with $6.01 billion in the third quarter of 2001. Including its share of Cingular, total operating revenues were $7.02 billion, a decline of 5.7% vs. the third quarter of 2001.

Affecting the company’s revenues was a decline in BellSouth’s Total Communications Group, which fell 3.7% compared with the third quarter of 2001. The carrier also saw a 2.7% drop in the number of access lines its serves.

On the wireless side of the business, Cingular reported a net reduction of 107,000 customers during the third quarter, ending the quarter with 22.1 million customers nationwide. The decline was mostly due to WorldCom’s decisoin to exit the wireless resale business.

“Overall demand weakness remains a factor offset by a few points of light,” said Ron Dykes, chief financial officer for BellSouth. One of those points was DSL. BellSouth added 121,000 new DSL customers in the third quarter, compared with 74,000 in the previous three months.