BellSouth reports slight profit increase for third quarter

<p>BellSouth Corp., the part owner of Cingular Wireless and the dominant local telephone provider in the Southeast, reported a 2.3 percent increase in third-quarter profit on Tuesday, spurred by improving wireless and broadband margins.</p><p>The Atlanta-based company said it earned $817 million, or 44 cents a share, for the three months ended Sept. 30 compared to a profit of $799 million, or 44 cents a share, for the same period a year ago. The figures do not include Cingular Wireless.</p><p>Including the impact of its 40 percent ownership of Cingular Wireless and billing credits related to Hurricane Katrina, BellSouth said its normalized earnings were $845 million, or 46 cents per share.</p><p>Analysts surveyed by Thomson Financial expected earnings of 46 cents a share. Thomson said the analysts based their estimates on BellSouth's normalized results.</p><p>Revenue slipped to $5.07 billion from $5.095 billion recorded a year ago.</p><p>"All of these results were delivered despite the destruction and the disruption of Hurricane Katrina," said Ron Dykes, the outgoing chief financial officer.</p><p>The company lost about 40,000 power lines from Katrina, Dykes said. In total, the hurricane cost the company 11 cents per share.</p><p>Other one-time factors include the merger integration costs at Cingular, which cost 3 cents per share, and a gain of 12 cents a share from the sale of Cellcom, an Israeli cell phone company.</p><p>BellSouth said its board's decision to repurchase up to $2 billion in common stock through the end of 2007 reflects the company's confidence in the future.</p><p>BellSouth shares rose 25 cents to $25.87 at the close of trading on the New York Stock Exchange.</p><p>"Results for the quarter remained strong despite extraordinary challenges we faced with Hurricane Katrina," said company CEO Duane Ackerman.</p><p>BellSouth, one of the regional phone companies that emerged from the Bell System breakup, is the dominant local service provider in Georgia, Tennessee, Florida, Alabama, Kentucky, Mississippi, North Carolina, South Carolina and Louisiana. It and SBC Communications Inc. of San Antonio are the parents of Atlanta-based Cingular, the nation's largest cell phone provider.</p><p>The company's profit growth this quarter was fanned by BellSouth's high-speed Internet service, which added more than 200,000 customers during the quarter. The jump was fueled by a simplified pricing structure that was "a hit" with customers and sales teams, Dykes said.</p><p>Pricing plans that give families discounts have also helped the company _ and the industry _ expand tremendously, Dykes said.</p><p>"When we put a cell phone in the hand of every man, woman and child, it will have an effect," Dykes said. He added the company will likely continue to delve into new territory, noting the rise in "kiddie plans" that offer cell phones to children that are limited to a few speed dial buttons.</p><p>For the first nine months of the year, BellSouth said it earned $2.41 billion, or $1.31 a share, compared to a profit of $2.72 billion, or $1.48 a share, for the same period a year ago. Nine-month revenue rose 1 percent to $15.31 billion, compared to $15.15 billion a year ago.</p><p>___</p><p>On the Net:</p><p>HASH(0x1cdc0e8)</p>

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