posted a 15% profit gain Thursday, driven by continued expansion at its Cingular wireless venture.
The Atlanta-based telco, which is in the process of being acquired by
, made $784 million, or 43 cents a share, for the quarter ended March 31. That's up from the year-ago continuing operations profit of $683 million, or 37 cents a share. On a so-called normalized basis, excluding certain costs and including Cingular profit, earnings were 54 cents a share in the latest quarter, beating the Thomson Financial analyst consensus estimate by a penny.
Revenue rose 1.3% from a year ago to $4.65 billion. So-called normalized revenue, including Cingular's contribution, rose 4.5% to $8.7 billion.
"BellSouth's strong earnings growth reflects improving trends in our operating results," said CEO Duane Ackerman. "During the quarter, our revenue growth was driven by the addition of broadband and wireless customers, which demonstrated the strength of our portfolio in the marketplace."
Operating free cash flow (defined as net cash provided by operating activities less capital expenditures) was $551 million. Capital expenditures for the quarter amounted to $1.08 billion, including approximately $135 million of incremental expenditures for Katrina restoration efforts. Net of storm impacts, increased levels of capital expenditures were driven by planned 2006 acceleration of broadband investments toward the first half of the year.
As of March 31, total access lines were 19.8 million, down 238,000 compared to Dec. 31, 2005. Residential access line loss continues to be primarily driven by wireless substitution and, to a lesser extent, by competition from cable telephony providers. Retail residential access lines were down 120,000. Retail business access lines increased 21,000 driven by Small Business gains. Wholesale lines resold by BellSouth competitors were down 137,000 compared to Dec. 31, 2005.
During the first quarter, BellSouth added a record 263,000 net new broadband DSL customers and served more than 3.1 million total customers at quarter-end. Network data revenue rose 9% to $1.3 billion, while retail data revenue grew 15.8%, driven by a 31.8% increase in retail DSL revenue and ongoing growth in revenue from emerging retail data services such as BellSouth Metro Ethernet Service and BellSouth Virtual Private Network.