BellSouth saw their profits increase in the last quarter, but the way it happened has to concern executives and shareholders. The 34 percent increase in profits was due almost entirely to growth at Cingular Wireless, which BellSouth is owner of 40% of Cingular through a joint venture with AT&T. Strong Cingular results offset declining results in the wireline business which is the traditional core of BellSouth.
Fourth quarter profits were $965 million, up from $720 million last year. Revenue was up from $7.9 billion to $8.6 billion. Cingular added 1.8 million customers in the quarter. That, along with broadband services, are what BellSouth is relying on for growth. They added 204,000 new customers. That offsets the 6.2% decrease in home and business phone lines from the previous year.
The broadband results were slightly ahead of analyst’s expectations and the Cingular results were far better than expected. This led to a 1.3 percent increase in early trading of BellSouth stock.