updated 7/26/2004 9:24:04 AM ET 2004-07-26T13:24:04

Telecommunications giant BellSouth Corp. reported a 5 percent gain in second-quarter profit on flat revenue as it continued to lose access lines but benefited from growth in its long-distance and high-speed Internet services.

The results, announced Monday, beat Wall Street expectations.

Atlanta-based BellSouth said it earned $996 million, or 54 cents a share, for the three months ending June 30, compared to a profit of $951 million, or 51 cents a share, in the same three-month period a year ago.

Analysts surveyed by Thomson First Call were expecting earnings of 50 cents a share.

Revenue in the April-June quarter was roughly the same as last year at $5.08 billion.

BellSouth said it added 535,000 mass-market long distance customers in the second quarter. The company said the increase was driven by its offering of unlimited long-distance plans and new flat-rate calling plans.

BellSouth said it added 120,000 net DSL customers during the second quarter. Total access lines, however, declined in the quarter by 3.7 percent from a year ago to 21.8 million.

For the first six months of the year, BellSouth said it earned $2.60 billion, or $1.41 a share, compared to a profit of $2.18 billion, or $1.18 a share, in the year-ago period. Six-month revenue was down slightly at $10.06 billion, compared to $10.09 billion a year ago.

BellSouth is the dominant local phone provider in nine southeastern states. It jointly owns Cingular Wireless LLC, the nation's No. 2 cell phone provider, with SBC Communications Inc. of San Antonio.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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