Revenues were down 1.8% to $10.3bn. The biggest decline came in the telco’s voice business, which was down 9.2% to $5.8bn. The biggest jump was in directory advertising, which was up 52.6% to $1bn. The company said that it had adopted an accountancy change, which resulted in a more even distribution of directory advertising revenues, and which boosted revenue by $500m.
Operating income was down 13% to $1.9bn, while net income was $5bn, or $1.50 per share, compared to a $193m loss last year. Excluding the effect of accounting changes, net income was $0.74. The figures include a gain of $0.32 per share from its Cegetel French wireless joint venture. Analysts had expected SBC to turn in earnings of $0.36 per share for the quarter.
The company said its outlook for the year was unchanged. In January the company predicted a low single digit decline in revenues this year, with significant increases in operating expenses, mainly because of increased pension and medical costs. SBC also detailed a wide range of other expenses, from medical and pension costs to rolling out its GSM network, that would depress its earnings per share in the year ahead.
Source: Computerwire
