reported fourth-quarter earnings that were roughly in line with expectations, but investors remained unimpressed.
New York-based Bell Atlantic, the nation's No. 2 local phone carrier, which is set to buy
, posted fourth-quarter profit of $1.2 billion, or 77 cents a share, excluding one-time items, compared with $1.1 billion, or 69 cents a share, in the year-ago period. The results were in line with
First Call/Thomson Financial's
consensus estimate based on a survey of 21 brokers.
BellSouth of Atlanta beat the consensus estimate by a penny, reporting profits of $1.0 billion, or 53 cents a share, excluding one-time gains, compared with $831 million, or 42 cents a share, a year ago.
In midday trading, Bell Atlantic was up just 1/16 at 60 1/8 while BellSouth was down 1, or 2%, at 46 1/16. (Bell Atlantic closed up 1/16, or 0.10%, at 60 1/8. BellSouth closed down 1 1/8, or 2.39%, at 45 15/16.)
Analysts said Bell Atlantic outperformed BellSouth in terms of revenue growth.
"Bell Atlantic's revenue was slightly ahead," said Michael Bowen, a telecommunications analyst at
Deutsche Banc Alex. Brown
. "BellSouth was right in line with revenue projections." Bowen rates BellSouth a buy and Bell Atlantic a hold. His company has done underwriting for both.
Bell Atlantic said its sales grew by 6.6% in the fourth quarter, to $8.6 billion. BellSouth, the dominant telecommunications company in the Southeast, reported an 8.3% increase in revenues to $6.7 billion in the last quarter of the year.
Bell Atlantic, which recently became the first of the Baby Bells to provide long-distance service, said demand was "even better" than had been expected. Revenues from long distance will be reflected in first-quarter results.
The company noted, however, that it had shored up only 30,000 DSL (digital subscriber line) customers, far below the 100,000 it had previously anticipated.
Richard Klugman, a telecommunications analyst with
Donaldson Lufkin & Jenrette
, attributed the shortfall to difficulties with deploying and marketing the service to potential household customers. He added that he was "not terribly confident" Bell Atlantic would meet its target of 500,000 customers by the end of 2000. Klugman, who has assigned neutral ratings to BellSouth and Bell Atlantic, said his firm has not done any recent underwriting for the companies.
Bell Atlantic said its mobile unit had 815,000 new customers in the fourth quarter from sales and through the
acquisition. The company also reported a 26.2% increase in data revenue growth.
Analysts said BellSouth had an impressive 18.6% spike to $836 million in fourth-quarter revenue from its domestic cellular and PCS business. It added 661,000 customers in 1999, including 202,000 new subscribers in the fourth quarter.
Its Internet service,
, grew more than 82% in 1999 to nearly 700,000 consumer and business customers.
For the year, BellSouth reported earnings of $2.00 a share in 1999, excluding special items, compared with $1.64 a share in 1998. Revenues for the year rose 9.1% to $25.2 billion, surpassing the $25 billion mark for the first time.
Bell Atlantic said its fourth-quarter diluted earnings rose to $3.01 a share in 1999, compared with $2.72 a share a year earlier. Revenues for the year were up 5.1% to $33.2 billion.