SBC's Profits Fall; Warns on 2001
NEW YORK (Reuters) - Local telephone company SBC Communications Inc. (NYSE:SBC - news) said on Monday its first-quarter profits fell due to the slowing economy and costs to build its new Internet and long-distance telephone operations, and warned its results for the full-year would fall below Wall Street forecasts.
Excluding one-time items, SBC's profits fell to $1.739 billion, or 51 cents a share, compared with $1.910 billion, or 56 cents a share, a year ago.
Those results were in line with Wall Street's tempered forecasts, which ranged from 49 cents to 53 cents, with a consensus estimate of 51 cents, according to research firm Thomson Financial/First Call.
SBC, the dominant local telephone company in the southwestern and midwestern United States, warned in March its first-quarter results would fall below its original targets.
SBC on Monday extended that warning, saying earnings for the full year, before one-time items, would be in the range of $2.35 to $2.40 a share. Wall Street analysts had expected the company to earn $2.46 a share, according to First Call.
``The economy is having a greater impact on our business than we projected,'' SBC Chairman Edward Whitacre said in a statement.
SBC's net income rose to $1.854 billion, or 54 cents a share, compared with $1.822 billion, or 53 cents a share a year ago. The 2001 first-quarter results included pension settlement gains and charges related to the company's cable operations.
San Antonio, Texas-based SBC said revenues, including results from its Cingular Wireless joint venture, increased 4.7 percent to $13.1 billion. Data revenues increased 39.9 percent to $2.1 billion.
The company added 187,000 new DSL (Digital Subscriber Line) high-speed Internet customers, for a total of 954,000 DSL subscribers. That growth fell short of some analysts forecasts. ABN Amro analyst Kevin Roe had expected the company to 223,000 DSL subscribers during the quarter.
Cingular Wireless, SBC's joint venture with BellSouth Corp. (NYSE:BLS - news) added 854,000 subscribers, bringing its total customer base to 20.5 million. Cingular's wireless services revenues increased 14.8 percent to $3.1 billion compared with pro forma levels in the year-ago quarter.
SBC, one of the first Baby Bells to win regulatory permission to offer long-distance telephone service in its home region, said it ended the quarter with 2.2 million long-distance lines in Texas, Kansas and Oklahoma. SBC has filed an application at the Federal Communications Commission (news - web sites) to enter the long-distance market in Missouri, and its has applications pending with state regulators in California, Nevada and Arkansas.
Shares of SBC have fallen about 13 percent over the past year and performed roughly in line with the Standard and Poors 500 Index. The stock closed Friday at $40 on the New York Stock Exchange (news - web sites). |
