BellSouth (BLS) beat third-quarter earnings targets.

The Atlanta-based telco made $1.06 billion, or 58 cents a share, up from the year-ago $817 million, or 44 cents a share. Revenue rose 2.9% from a year ago to $5.22 billion.

Excluding certain items, latest-quarter earnings were 65 cents a share, 6 cents ahead of the Thomson Financial analyst consensus estimate.

During the third quarter, BellSouth added 176,000 new DSL customers, reaching a total of more than 3.4 million broadband DSL customers. The vast majority of new customers chose BellSouth's higher speed offers -- FastAccess DSL Xtreme and FastAccess DSL Xtreme 6.0. Year-over-year the average revenue per unit on DSL was up slightly as improved customer mix offset revenue impacts from the discontinuance of regulatory recovery fees.

As of Sept. 30, 2006, total access lines were 19 million, down 6.9% year-over-year. For the quarter, total access lines declined 301,000. Retail residential access lines declined 135,000 reflecting losses to wireless substitution and cable telephony service. Retail small business access line gains were 20,000, offset by a decline in retail large business access lines of 13,000 lines. Wholesale lines declined 174,000 compared to June 30, 2006.