SBC Communications Inc took a swipe at US telecom regulators yesterday as it unveiled its third quarter results.
The San Antonio, Texas-based giant said its figures, which included earnings a penny below analysts’ expectations, reflect the destructive efforts of government regulatory policies, as well as economic softness and increased competition. Chairman and CEO Edward Whitacre said no amount of cost cutting can offset the effects of rules that require us to sell our lines and related services to competitors below cost. Whitacre has stepped up his attacks on federal telecoms regulatory policies in recent months.
SBC’s revenues for the quarter ending September 30 were down 6.9% on the year to $10.6bn. Operating income was down 24.8% to $2.1bn, while net income was down 14.6% to $1.8bn. This resulted in earnings per share of $0.53, a penny below analyst’s expectations.
Once the company’s investment in wireless operation Cingular was taken into account, revenues were $12.8bn, down 5.5% on the year, while net income was down 15.8% to $1.7bn.
Despite the claimed pressure from telecoms regulations, and the slight shortfall on earnings expectations, SBC stuck to its guidance for the full year. It expects earnings for the full 12 months to come in at $2.26, before charges. Worryingly for equipment vendors though, it added it expects capital expenditures for the year to be $7.5bn, down from $11.2bn the previous year.
For the year to date, revenues were down 6.1% to $31.9bn, with net income of $3.5bn, down 41.4% on the year. Once Cingular was taken into account year so far revenues were down 4.5% to $38.5bn, with net income of $3.6bn, down 37.6%.