SBC Shows DSL Gains

The big telco beats its first-quarter earnings target by a penny.
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posted a first-quarter profit Monday as the company added 504,000 fast Internet lines.

For its first quarter ended last month, the San Antonio, Texas, telco earned $885 million, or 27 cents a share. That's down from the year-ago continuing operations profit of $1.9 billion, or 58 cents a share. But excluding certain costs, latest-quarter earnings rose to 34 cents a share from 33 cents a year ago, beating the Thomson First Call analyst consensus estimate by a penny.

Revenue rose 2.4% from a year ago to $10.2 billion, and operating margin advanced to 15.2% from 15.1% a year earlier.

Total retail consumer primary lines increased by 16,000, SBC's first quarterly gain in the category in five years. Consumer additional lines declined by 104,000, SBC's smallest decline in additional lines in four years. SBC's retail business line base declined by 45,000, and switched wholesale lines declined by 343,000.

Wireline data revenue grew 6.7% to $2.8 billion, driven by robust digital subscriber line Internet growth, along with solid results in transport and integration services. SBC added 504,000 DSL lines in the first quarter to reach 5.6 million in service. The company also added 1.1 million long-distance lines.

Retail bundling, covering the proportion of subscribers who use more than one SBC service, rose to 64% from 50% a year earlier.

SBC closed Friday at $23.20.