BellSouth’s Net Income Falls 67%; Shares Plummet

Shares of BellSouth Corp. skidded 18% to a multiyear low Monday after the company posted disappointing second-quarter earnings and said it saw no relief for the struggling telecommunications sector.

The biggest provider of local phone service in the Southeast said its net income for the quarter slumped 67% to $293 million, or 16 cents a share, from $880 million, or 47 cents, a year earlier. Sales slipped to $5.78 billion, down 3.4% from $5.99 billion.

The latest results include expenses of 19 cents a share to write down the value of its stake in Qwest Communications International Inc. and other companies and 12 cents to pay for job cuts. Excluding those and other costs, BellSouth would have earned 53 cents a share. Analysts surveyed by Thomson First Call expected earnings of 57 cents.

BellSouth pared its 2002 sales and profit forecasts for a third time this year. The Atlanta company expects a per-share profit of $2.13 to $2.20, down from previous estimates of as high as $2.43.

BellSouth shares fell $5 to $22.61 on the New York Stock Exchange in their biggest one-day percentage drop. The decline also dragged down rivals SBC Communications Inc. and Verizon Communications Inc. WorldCom Inc., the long-distance operator that filed for bankruptcy protection Sunday, owes the local carriers hundreds of millions of dollars for using their networks to complete calls.

In other technology earnings:

* Texas Instruments Inc. reported second-quarter net income of $95 million, or 5 cents a share, contrasted with a loss of $197 million, or 11 cents, a year earlier. The firm, whose chips power two-thirds of the world’s cellular phones, said sales rose 6% to $2.16 billion. Profit excluding one-time costs was $109 million, or 6 cents, matching analysts’ expectations.

* Computer Associates International Inc., the fifth-largest software maker, reported a narrower net loss of $65 million, or 11 cents a share, for its fiscal first quarter, compared with $342 million, or 59 cents, a year earlier. Sales rose 7% to $765 million. Excluding one-time items, Computer Associates said it would have had a profit of $12 million, or 2 cents; analysts on average expected it to break even.

* Novellus Systems Inc. reported an 80% drop in second-quarter profit to $12 million, or 8 cents a share, as analysts expected, and said third-quarter results would miss forecasts. Sales fell 41% to $221.1 million. For the third quarter, Novellus expects profit of 10 cents a share on sales of $250 million, compared with analyst expectations of 15 cents on sales of $270 million.