SBC sees a flat world, revenue decline

At first glance, the numbers don’t look too bad, but the reality eventually sinks in that growth is flat and revenue is down. SBC Communications reported its fourth-quarter earnings today with earnings of $0.64 per diluted share, which is up 12.3% from $0.57 in the fourth quarter of 2000. First Call expected SBC to achieve earnings of $0.62 a share.

Before one-time items, the net income for the quarter was $2.2 billion compared with $2.0 billion in 2000. Including those one-time items, net income was $1.2 billion or $0.37 per share. That number is down 3.9% from $1.3 billion or $0.38 from a year ago. For the year, net income was $7.2 billion.

The company expects continued pressure through the first quarter, then stabilization followed by some improvement later in the year, according to Randall Stephenson, chief financial officer at SBC. “We expect revenue growth of 1% to 3%,” Stephenson said.

That pressure no doubt led to the 5000 job cuts in the quarter, which will be followed up by more this year.

But on a positive note, the company believes its data business revenue will improve in the latter half of 2002. The pending long-distance entry into California is also supposed to have a positive effect.