SBC Communications Inc., the huge regional phone company that is buying AT&T Corp., said Monday that first-quarter earnings fell 53.4 percent from a year ago due to costs associated with Cingular’s purchase of AT&T Wireless, but operating profit beat Wall Street expectations.
Earnings fell to $885 million, or 27 cents per share, for the January-March period from $1.94 billion, or 58 cents per share, a year ago. Excluding merger-related expenses at Cingular Wireless, which is 60 percent owned by SBC, the company earned $1.1 billion, or 34 cents per share, in the latest quarter.
Revenue grew 2.4 percent to $10.25 billion from $10.01 billion last year, with wireline revenues up 2.8 percent and consumer wireline revenue up 3.9 percent.
Analysts surveyed by Thomson Financial were expecting profit of 33 cents per share on sales of $15.13 billion in the latest quarter.
SBC added 504,000 DSL lines in the first quarter to reach 5.6 million in service, marking SBC’s best-ever quarterly increase in DSL lines. The company’s total long distance lines increased by 1.1 million to 22 million in service, up 20.3 percent versus the year-ago quarter.
Wireline data revenues grew 6.7 percent to $2.8 billion, driven by robust DSL/Internet growth as well as solid results in transport and integration services.
In the first quarter, Cingular posted a net subscriber increase of 1.4 million, following a pro forma gain of 1.8 million in the preceding quarter. Total average monthly subscriber churn was 2.2 percent, down from an adjusted pro forma 2.4 percent in the fourth quarter of 2004.
Cingular ended the first quarter with 50.4 million total subscribers,
SBC is in the process of completing a proposed $16 billion deal for AT&T, the long-distance company that was once its parent before the breakup of the Bell System in the 1980s.
