BellSouth Q2 Profits Down
"The realignment of our assets toward wireless and broadband services is starting to pay off," said Duane Ackerman, Chairman and Chief Executive Officer. "Cingular delivered strong growth in customers, revenues and operating margins. Our results this quarter clearly demonstrate how Cingular's progress impacts BellSouth's bottom line. Our wireline business and growing Advertising & Publishing services delivered consistent, overall financial performance."
Normalized Results from Continuing Operations
Normalized results from continuing operations include BellSouth's 40 percent proportionate share of Cingular's revenues and expenses. Cingular completed its acquisition of AT&T Wireless on Oct. 26, 2004. Results prior to the acquisition date have not been restated.
For the second quarter of 2005, normalized revenue was $8.52 billion, up 2.6 percent compared to the first quarter of 2005. Operating margin was 19.2 percent, a 190 basis point improvement compared to the first quarter of 2005. Net income was $849 million, up $131 million from the first quarter of 2005. These improvements reflect Cingular's continued growth and merger integration progress, stable results from Communications Group and continued Advertising & Publishing revenue growth.
Year-over-year, second quarter 2005 normalized revenue was $8.52 billion compared to $6.71 billion in the second quarter of 2004. Second quarter normalized net income decreased $89 million compared to $938 million in the second quarter of 2004, impacted by a decline in core voice revenues and higher retiree medical expense in the Communications Group and financing costs associated with the acquisition of AT&T Wireless. Year-over-year, Cingular's higher operating income before depreciation and amortization offset increased intangible amortization expense related to the acquisition of AT&T Wireless.