ATLANTA-BellSouth Corp.’s stock slipped Friday after the company revised its earnings forecasts for next year due to the cost of expanding its high-speed Internet business and Latin American wireless operations.
The revised earnings forecast calls for 9 percent growth next year, compared with BellSouth’s original prediction of 15-percent growth. The company’s shares were down more than 12 percent in mid-day trading to $43.06 per share on the news. CS First Boston analyst Dan Reingold also cut his target price on BellSouth’s stock from $65 to $60.
Deutsche Banc Alex Brown analysts Gary Jacobi cut his earnings forecasts for BellSouth from $4.8 billion, or $2.58 per share, to $4.5 billion, or $2.39 per share, but remained confident that the Baby Bells were well positioned in the telecom space.
“Their size, financial resources, and particularly important ownership of the local infrastructure is the key to their success,” Jacobi said in a report. “The growth engines of data, long distance, DSL, wireless and international operations will continue to drive strong top line performance.”
BellSouth said it expected its Latin America wireless customer base to grow by 30 percent next year, driven by increased penetration in existing markets, the recently developed interior regions in Chile, Peru and Argentina, and recent acquisitions in Colombia.
