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BellSouth surprises, dives
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January 25, 1999: 1:31 p.m. ET
Baby Bell beats the Street by a penny, then plunges on Supreme Court ruling
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NEW YORK (CNNfn) - BellSouth Corp. reported fourth-quarter earnings just slightly ahead of Wall Street expectations Monday morning, fueled by strong growth in Internet and wireless services.
The Atlanta-based Baby Bell reported earnings for the quarter ended Dec. 31 of $1 billion, or 51 cents per diluted share, a 16.7 percent increase over earnings in the year-ago quarter of $729 million, or 37 cents per diluted share.
Excluding one-time gains resulting from the sale of cellular operations in New Zealand and income from a loan settlement, earnings totaled $831 million, or 42 cents a share. Analysts had expected BellSouth (BLS) to earn 41 cents a share, according to First Call.
Despite the upside earnings surprise, shares of BellSouth traded sharply lower during the morning trading session Monday after the Supreme Court overturned a lower court decision and revived federal rules designed to promote competition in local telephone markets.
Total revenue for the quarter grew to $6.1 billion, up from $5.6 billion for the same quarter in 1997.
"The investments we're making, and the way we're executing our growth strategies, continue to pay off," said Duane Ackerman, chairman and chief executive officer. "In 1998 we invested a record $7 billion in our businesses, and we continue to generate powerful revenue growth from sources such as data, wireless, Internet, enhanced calling features, and digital television."
BellSouth's data and digital services revenue increased to $528 million in the fourth quarter, a 33 percent increase over the $398 million earned in the previous quarter.
The company's total revenue in 1998 came in at $24.1 billion, an increase of 12.5 percent compared to 1997. Excluding special items in both years, earnings-per-share totaled $1.64, compared to $1.41 in 1997. Net income excluding special items was $3.3 billion in 1998, compared to $2.8 billion in 1997.
BellSouth stock was down 2-3/16 to 45-7/8 in early afternoon trade.
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BellSouth
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