SBC ( SBC) posted a third-quarter profit, driven by gains in its high-speed Internet offerings.

The San Antonio telco made $1.25 billion, or 38 cents a share, even with the year-ago period's continuing operations profit. Excluding certain costs, latest-quarter earnings were 47 cents a share, 6 cents better than the Thomson First Call analyst consensus estimate. Revenue inched forward to $10.32 billion from $10.29 billion a year earlier.

SBC said latest-quarter earnings were hit by an 8-cent charge on integration costs at Cingular Wireless, and a 1-cent charge related to recent Gulf Coast storms.

"SBC continues to execute well, and the fundamentals of our business are strong," said Edward E. Whitacre Jr., SBC chairman and chief executive officer. "DSL gains accelerated. Cingular Wireless' results are trending better than we had projected. Productivity initiatives have helped reduce costs and expand margins. And cash from operations continues to be strong, which has allowed us to increase activity in our share repurchase program."

SBC added 528,000 DSL lines in the third quarter, its best-ever quarterly increase. Wireline data revenues grew 10.1% to $3 billion, and long distance lines in service rose 18%.

But SBC said it continued to lose wireline customers. Its retail business line base declined by less than 2,000 in the third quarter, compared with a decline of 168,000 in the third quarter a year ago. Consumer retail primary lines declined by 114,000, versus 119,000 in the third quarter of 2004. Additional lines declined by 119,000, versus a decline of 140,000 in the third quarter of 2004. As expected, SBC's switched wholesale line total declined by 556,000 -- vs. a decline of 213,000 in the third quarter of 2004 -- due to a 643,000 decline in UNE-P lines. SBC ended the third quarter of 2005 with 50.2 million total switched-access lines.

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