The regional telephone provider cut its projected earnings growth to 3 percent to 5 percent for the year. In January, BellSouth predicted earnings growth of 7 percent to 9 percent.
BellSouth also said it sees annual revenue growth of 2 percent to 4 percent. The earlier projection had been 5 percent to 7 percent. The revenue projections do not include Cingular, BellSouth's wireless venture.
Investors sent BellSouth shares down $2.55, or 6.3 percent, to $37.90 in midday trading on the New York Stock Exchange.
The company's warning cited weak demand, primarily in the U.S. telecommunications market. BellSouth cut its capital spending forecast by $500 million for the year, to between $4.8 billion and $5 billion.
BellSouth also said it had been hurt by weakness in Argentina and Venezuela, citing currency devaluations and deteriorating economies in both countries.
And BellSouth has faced hurdles in its push to offer long-distance service. It withdrew its application with the Federal Communications Commission in December after regulators warned it would be rejected.
The Justice Department had also opposed the bid, citing concern about how well BellSouth serves its local competitors, who resell part of the company's network.
Last week BellSouth offered regulators a new application, hoping to satisfy their concerns. The FCC has not ruled on the request, which covers long-distance service in Georgia and Louisiana.
The company did not change its guidance for subscribers it hopes to gain for its high-speed Internet service. BellSouth still expects 1.1 million customers by the end of 2002.
BellSouth is the nation's No. 3 regional phone provider, covering nine Southeastern states.
http://accesswdun.com/article/2002/2/198471