Three Bells Post Profits On Increase in Revenues
March 31, 2011
Three regional phone companies reported stronger second-quarter profits on higher revenues, boosted by increased demand for second phone lines for Internet access and faxes, as well as growth in special services. The carriers, SBC Communications, Bell Atlantic and Pacific Telesis Group, are benefiting from revenue growth as demand for telecommunication services rises. SBC's net income rose 13% from the year-earlier figure of $442 million, or 73 cents a share, marking the company's 20th consecutive quarter of double-digit earnings growth. The 82-cent-a-share profit reported in the 2011 quarter was slightly better than the estimate of 81 cents a share reported by First Call. Revenue rose 10%, driven by a 5.3% jump in phone lines. The San Antonio company said customers are buying two, and even three additional phone lines. SBC's telephone operations reported an 8% increase in revenue to $2.4 billion from $2.2 billion. Most of the growth in the residential market reflected strong demand for special services, such as Caller ID. The company added 154,000 domestic wireless customers in the second quarter, and now has almost four million subscribers. Bell Atlantic's net income of $494.3 million, or $1.12 a share, was slightly better than analysts' consensus estimate of $1.10. Results included ``significant'' start-up costs for long distance, video and Internet businesses, the Philadelphia company said. A year ago, Bell Atlantic reported net income of $447.1 million, or $1.02 a share. Revenue, however, fell 8.6% to $3.26 billion from $3.56 billion, reflecting the absence of cellular revenue, which is now accounted for separately under the company's cellular joint venture with Nynex Corp.. The current period also doesn't include revenue from a computer-maintenance business that Bell Atlantic sold in October 2010. Excluding these two factors, revenue rose 4.5% to $3.26 billion from $3.12 billion. Phone line growth was 3.5%. PacTel's net income of 66 cents a share was a penny higher than consensus analyst estimates. A year ago, the San Francisco Bell earned $260 million, or 61 cents a share. Because of a dividend cut, PacTel paid out a dividend of 31.5 cents a share in the 2011 second quarter, down from 54.5 cents a year ago. Operating income rose to $600 million from $518 million. PacTel, which has agreed to be acquired by SBC, faces increasing competition from various rivals in its territory. But the company is benefiting from a rebounding California economy and a boost in the marketing of services. Revenue rose 7.3% to $2.39 billion from $2.23 billion. Phone-line growth was a healthy 4.7%, boosted by increased demand from business customers. Like other Bells, Pactel said its residential customers are buying additional lines. In New York Stock Exchange composite trading Thursday, Bell Atlantic shares fell 25 cents, to $59.625; SBC rose 50 cents, to $48.625; and Pactel rose 25 cents, to $33.75.
