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BellSouth, the US telecoms group, reported flat third-quarter profits as a one-time gain was offset by costs related to Hurricane Katrina.

The group also announced a $2bn share repurchase programme.

“Results for the quarter remained strong despite the extraordinary challenges we faced with Hurricane Katrina,” said Duane Ackerman, chief executive.

Net earnings of $817m, or 44 cents per share, compared with $799m, or 44 cents per share, in the same period a year earlier.

The results included $200m in costs from Hurricane Katrina, which hit BellSouth’s network in Louisiana and Mississippi, as well as a $228m gain from the sale of its stake in Cellcom, an Israeli mobile telephone company.

Revenues grew 26 per cent to $8.49bn in spite of billing credits for Katrina that reduced revenues by $63m.

Excluding one-time items, profits were 5 per cent lower than a year earlier, reflecting the continued decline in revenues from its tradition fixed-line business and higher financing costs for its Cingular Wireless joint venture with SBC Communications.

Before one-time items, and including its 40 per cent share of Cingular, BellSouth earned $845m or 46 cents per share compared with $893m or 49 cents per share a year earlier.

BellSouth lost 354,000 local lines, or 1.7 per cent of its total lines, during the third quarter, higher than the average line loss of 273,000 over the past six quarters.

Katrina knocked out about 40,000 of the lost lines, the company said. Up to 15 per cent of the line losses were customer defections to cable companies and VoIP (voice over internet protocol) services such as Vonage.

The company added 222,000 long-distance lines in the quarter and 66,000 satellite TV subscribers through a partnership with DirecTV Group to bring its total to more than 460,000.

Unlike SBC and Verizon, BellSouth has not announced plans to launch advanced TV and video service over its network.

Copyright The Financial Times Limited 2017. All rights reserved.
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