), Verizon (VZ
) and SBC Communications (SBC
Analyst Adam Quinton says the decline in BellSouth was due to weak Latin American businesses, which fell 19.8% year over year to $538 million, as well as weak U.S. demand and share loss impacts.
Quinton says BellSouth has a strong balance sheet and trades on a low double-digit price-earnings ratio. He says the company also is generating cash and is committed to a share buyback. Still, he says second quarter results point to weaker outlook into the longer term. He notes the slowdown at BellSouth has implications for other regional bell operating carriers in the longer term as well.