BellSouth Profit Inches Up

BellSouth (BLS) posted a slight gain in second-quarter profits as sales held flat.

The Atlanta local phone giant earned $996 million, or 54 cents a share, in the second quarter ended in June, compared with $951 million, or 51 cents a share, last year. Revenue was unchanged at $5.08 billion.

On an adjusted basis that factors out non-operating and discontinued items but including proceeds from Cingular, its wireless joint venture with SBC ( SBC), BellSouth posted earnings of $938 million, or 51 cents a share, on sales of $6.7 billion, in the latest quarter, up from $920 million, or 50 cents a share, on sales of $6.6 billion last year.

Analysts had been forecasting earnings of 50 cents a share on sales of $6.65 billion on the adjusted basis in the latest quarter.

The company added 553,000 long distance customers in the June quarter and says it has 40% of the toll call business in its market with 5.1 million subscribers. But the erosion of its core local phone business continued. BellSouth's total access line count fell to 21.8 million, nearly 4% below the same period last year.

Though some observers were impressed with the company's slight profit increase and modestly widened margins, shares of the big Bell dropped 81 cents, or 3%, to $25.09 in premarket trading.

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