BellSouth Q4 profits up 39%

BellSouth this week posted fourth quarter earnings of $787 million, or $0.43 per share, on revenue of $5.7 billion.

Profit increased 39% from the $574 million, or $0.31 per share, in the fourth quarter of 2002. Revenue edged up 0.9% from last year’s fourth quarter.

BellSouth’s results do not include the company’s 40% share of Cingular Wireless.

For the full year, BellSouth recorded net income of $3.9 billion, or $2.11 per share, on revenue of $22.6 billion. This compares to a profit of  $1.3 billion, or $0.71 per share, on revenue of  $22.4 billion in 2002.

Capital expenditures for 2003 were $3.2 billion, a reduction of 15.5% compared to 2002.

In 2003, BellSouth long-distance and DSL service revenue growth offset access line declines, holding Communications Group revenues nearly flat at $18.4 billion. In the fourth quarter, revenues increased 2.1% to $4.6 billion, compared to $4.5 billion in the same quarter the previous year.

In the fourth quarter, BellSouth Answers service bundles increased to more than 3 million, representing a 24% penetration of primary access lines. BellSouth Unlimited Answers bundle subscribers exceeded 1 million at the end of the fourth quarter.

Unlimited Answers allows customers to call anywhere in the U.S. anytime for a flat monthly fee.

BellSouth added approximately 3 million long-distance customers during 2003, for a total of 3.96 million customers and almost 30% penetration of its mass-market customers by year-end. During the fourth quarter, about 40% of new customers included international long distance in their calling plans.

BellSouth added 126,000 net DSL customers in the fourth quarter of 2003, compared to 97,000 customer additions in the fourth quarter of 2002, bringing its end-of-year total subscribers to 1.46 million. Led by DSL, data revenues of $1.1 billion grew 4% in the fourth quarter of 2003 compared to the same quarter of 2002.

Total access lines of 23.7 million at Dec. 31 declined 3.6% compared to a year earlier, affected by the economy, competition and technology substitution, BellSouth said. Residence and business access lines served by BellSouth competitors under UNE-P increased by 199,000 in the fourth quarter.

On the wireless side, Cingular added 642,000 net cellular/PCS customers in the fourth quarter. Cingular ended the quarter with more than 24 million cellular/PCS customers.

BellSouth’s share of Cingular’s revenues was $1.6 billion, a gain of 5.7% compared to the same quarter a year ago. Segment operating income was $131 million for the quarter, compared to $284 million in 2002.

For the full year of 2003, segment operating income totaled $915 million compared to $1.1 billion in 2002.