BellSouth reported normalized revenues (including its 40% share of Cingular) of more than $8.8 billion for the second quarter of 2006, representing normalized revenue growth of 3.4 percent. Earnings per share (EPS) from continuing operations were 49 cents, up 14.0 percent compared to the second quarter of 2005.
“Three consecutive quarters of double-digit earnings growth reflects the strength of our broadband and wireless businesses,” said Duane Ackerman, Chairman and Chief Executive Officer.
Some highlights for Q2 include:
- For the second quarter of 2006, operating free cash flow (defined as net cash provided by operating activities less capital expenditures) was $980 million.
- CAPEX for Q2 was $950 million, including approximately $130 million of incremental expenditures for Katrina restoration efforts.
- Communications Group revenues were $4.7 billion, a 1.0 percent increase over the second quarter of 2005. Growth in the mass-market and stabilization in the large business customer segments contributed to the improved results. Revenue streams for broadband data and long distance in these segments outpaced declines in the traditional voice business. Communications Group operating margin improved significantly to 24.9 percent, an increase of 130 basis points year-over-year and sequentially as the Company continued to focus on cost controls and held revenues stable.
- Network data revenues grew to $1.3 billion, a 10.0 percent increase over the second quarter of 2005. Retail data revenues growth of 18.7 percent year- over-year was driven by a 40.9 percent increase in retail DSL revenues and continued momentum from emerging retail data services indicative of market growth in IP broadband services.
- 3.3 million DSL customers — up by 128,000 new customers for the quarter.
- 7.5 million long distance customers and at quarter-end served more than 60 percent of its mass-market customer base with long distance.
- Approximately 63,000 customers added DIRECTV service to their BellSouth bundle, resulting in a total of 691,000 customers who have included DIRECTV service in their communications packages.
- As of June 30, 2006, total access lines were 19.3 million, down 460,000 compared to March 31, 2006. Residential access line loss in the second quarter reflects seasonal loss patterns, wireless substitution and competition from cable telephony providers.
- Retail residential access lines were down 251,000. Retail small business access line gains were nearly 25,000, offset by a 48,000 decline in retail large business access lines that was predominantly driven by the loss of a single customer.
- Wholesale lines resold by BellSouth competitors declined 181,000 compared to March 31, 2006.
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