BellSouth reported Q1 normalized revenue of $8.7 billion, up 4.5 percent year-over-year generated by growth in Communications Group, Cingular and Advertising & Publishing. Operating margins were 21.9 percent, improving year-over-year and sequentially. Normalized net income of $983 million grew 20 percent compared to the first quarter of 2005 driven primarily by Cingular's improved profitability.
Some highlights for Q1 include:
- Communications Group revenue was $4.7 billion, a 1.3 percent increase compared to the same quarter of 2005.
- BellSouth added a record 263,000 net DSL customers and served more than 3.1 million total customers at quarter-end.
- Network data revenue was $1.3 billion, up 9.0 percent from the same period of the prior year. Retail data revenue grew 15.8 percent from the same period last year driven by a 31.8 percent increase in retail DSL revenue and ongoing growth in revenue from emerging retail data services such as BellSouth Metro Ethernet Service and BellSouth Virtual Private Network. Total wholesale data was stable as demand for wholesale services from wireless carriers remained strong.
- BellSouth added 179,000 long distance customers and now serves almost 7.4 million long distance customers, a 59 percent penetration of its mass-market customer base.
- BellSouth added 105,000 DIRECTV customers/ Through the first quarter of this year, 628,000 customers have included DIRECTV service in their communications packages.
- As of March 31, 2006, total access lines were 19.8 million, down 238,000 compared to Dec. 31, 2005. Residential access line loss continues to be primarily driven by wireless substitution and, to a lesser extent, by competition from cable telephony providers. Retail residential access lines were down 120,000. Retail business access lines increased 21,000 driven by Small Business gains. Wholesale lines resold by BellSouth competitors were down 137,000 compared to Dec. 31, 2005.
- Communications Group operating margin was 23.6 percent compared to 24.2 percent for the same quarter of the previous year. Margins were negatively impacted as the company incurred approximately $85 million in incremental expenses completing the network repairs associated with damage caused by Hurricane Wilma which struck southern Florida in late October 2005.
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