SBC Matches Estimate

The company affirms its target of 5 million DSL lines by year-end.
Publish date:



third-quarter earnings shot up 77% from a year ago, lifted by a gain from the sale of some directory operations in the Midwest.

Excluding the gain, earnings rose moderately, with higher revenue from data services offsetting a dip in voice results.

SBC earned $2.09 billion, or 63 cents a share, in the three months ended Sept. 30, compared with earnings of $1.22 billion, or 37 cents a share, last year. The 2004 quarter included an $849 million gain from the directory sales, before which earnings from continuing operations were $1.25 billion, or 38 cents a share.

Sales rose about 1% from a year ago to $10.29 billion.

Analysts had been forecasting earnings of 38 cents a share on revenue of $12.81 billion in the quarter.

By segment, SBC's voice revenue fell 2.8% from a year ago to $5.31 billion in the most recent quarter, while data revenue rose 6.1% to $2.73 billion, long-distance voice rose 30% to $865 billion and directory advertising fell 3% to $926 million.

The company said wireline revenue rose 1.7% in the quarter compared with a year ago, while consumer wireline revenue rose 2.8%. It added 402,000 digital subscriber line customers in the quarter, up 28% from the second quarter's gain, and collected 9.2% more average monthly revenue per consumer retail line in the quarter.

"We delivered our second consecutive quarter of positive revenue growth, with an operating margin above our full-year outlook," SBC said. "We accelerated DSL growth and are solidly on track to reach our target of more than 5 million DSL lines in service by year's end. And we continue to lead the industry in long distance growth, as we added 1.3 million or more long distance lines for the seventh quarter in a row."