SBC Expects Full-Year Profit to Meet Forecast

SBC Communications Inc., the second-largest U.S. local phone company, said its second-quarter profit rose 7.3% to $2.07 billion, or 61 cents a share, and said full-year earnings will meet its forecast.

The San Antonio-based company said sales, including its interest in the Cingular Wireless joint venture with BellSouth Corp., rose 3% to $13.6 billion.

Analysts had lowered their expectations to 57 cents from 61 cents in April, when SBC reduced its full-year forecast.

The company also said Chief Financial Officer Donald Kiernan, 60, will retire within the next week and be replaced by Randall Stephenson. Stephenson, 41, is currently a senior vice president and has worked in SBC’s finance department for 20 years.

SBC, which sells local phone service in the Southwest, Midwest and in California, said “modest” sales growth in the second half of 2001, along with cost controls, will boost full-year earnings. Rivals BellSouth and Qwest Communications International Inc., blaming the slowing U.S. economy, reduced their 2001 forecasts earlier this week.

SBC shares rose $2.58 to close at $43.38 on the NYSE.