BellSouth misses, cuts jobs
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October 18, 2001: 10:39 a.m. ET
Telecom provider falls short for 3Q and cuts 3,000 jobs in slowing economy.
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NEW YORK (CNNmoney) - BellSouth Corp.'s third-quarter earnings fell short of Wall Street expectations Thursday, and the telecommunications provider said it is slashing 3,000 jobs because of increased competition amid the slowing economy.
Atlanta-based BellSouth (BLS: down $0.15 to $38.89, Research, Estimates) reported quarterly earnings of $1.7 billion, or 56 cents a share, before special items. That was up from $1.6 billion, or 55 cents a share, a year earlier. But analysts polled by research firm First Call expected a profit of 58 cents a share.
Revenue increased 7.7 percent to $7.5 billion from $6.9 billion.
Including impairment charges primarily related to its investment in Qwest Communications, BellSouth posted breakeven results for the third quarter.
The company took a 3 cents a share loss from the sale of 4.5 million Qwest stock and gained a penny a share after closing the sale of its 24.5 percent interest in Skycell, a wireless carrier in India.
BellSouth said it would record a $170 million to $200 million after-tax restructuring charge in the fourth quarter as it eliminates 3,000 jobs as part of a cost-cutting measure prompted by the slowing economy and increased competition.
As a result of those charges, BellSouth said it now expects fiscal 2001 earnings per share of $2.22 to $2.27. Analysts forecast full-year earnings at the lower end of that range, or $2.23 a share, according to First Call.
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The company also expects 8-9 percent revenue growth for the year including Cingular Wireless, and a 30 percent increase in data revenue. It expects to spend $5.5 billion to $6 billion on capital expenditures for the year and projects 600,000 DSL customers by the end of the year.
During the third quarter, Bell South's domestic wireless revenue increased 38.1 percent to $1.5 billion. Revenue from its Cingular Wireless business increased 13.6 percent.
Latin America revenue, including advertising and publishing, was $710 million in the third quarter. Earnings before interest, taxes, depreciation and amortization, or EBITDA, increased 17.3 percent to $224 million.
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