2Q04 Earnings Results

Bellsouth Corp
26 July 2004


For Immediate Release
July 26, 2004


                  BellSouth Reports Second Quarter Earnings


•       5.1 million long distance customers
•       1.7 million DSL customers
•       25 million Cingular Wireless customers


ATLANTA - BellSouth Corporation (NYSE: BLS) announced second quarter 2004
earnings per share (EPS) from continuing operations of 51 cents, a 4.1 percent
increase compared to 49 cents in the second quarter of 2003.  See below for
special items.

For the quarter, consolidated revenue from continuing operations totaled $5.1
billion, equal to revenue for the same quarter of the previous year.  Income
from continuing operations was $939 million compared to $908 million in the same
quarter a year ago.

Operating free cash flow from continuing operations (defined as net cash
provided by operating activities less capital expenditures) totaled $1.3 billion
for the second quarter of 2004.  Capital expenditures for continuing operations
in the second quarter of 2004 were $731 million compared to $677 million in the
same period in 2003.

In accordance with Generally Accepted Accounting Principles (GAAP), BellSouth's
reported consolidated revenues and consolidated operating expenses from
continuing operations do not include the Company's 40 percent share of Cingular
Wireless.

Normalized results from continuing operations include BellSouth's 40 percent
proportionate share of Cingular's revenues and expenses.  Normalized revenue was
$6.7 billion, an increase of 1.6 percent versus the second quarter of 2003.
Normalized net income was $938 million, an increase of 2.0 percent compared to
$920 million in the same quarter a year ago.   Normalized EPS was 51 cents in
the second quarter of 2004 compared to 50 cents in the same quarter a year ago.


Communications Group

During the second quarter of 2004, long distance and DSL contributed to the
slight increase in Communications Group revenue compared to the same period of
2003.   Operating margin for the second quarter of 2004 was 25.9 percent
compared to 26.3 percent for the full year of 2003 and 25.6 percent for the
previous quarter.

BellSouth added 535,000 mass-market long distance customers during the second
quarter of 2004.  BellSouth now serves over 5.1 million mass-market long
distance customers, representing an almost 40 percent penetration of its
mass-market base.  This increase was driven by unlimited long distance plans and
new flat rate calling plans.

For the second quarter, data revenue was $1.1 billion, up 4.8 percent compared
to the same quarter of 2003, driven by DSL and wholesale improvements.
BellSouth added 120,000 net DSL customers during the second quarter of 2004, for
a total of 1.7 million at quarter-end.  In April, BellSouth launched a
mass-market DSL service that offers download speeds of up to 3 megabits per
second.

Total access lines of 21.8 million at June 30 declined 3.7 percent compared to a
year earlier.  Residence and business access lines served by BellSouth
competitors under UNE-P (unbundled network elements-platform) increased by
216,000 in the second quarter.


Domestic Wireless / Cingular

For the second quarter, Cingular Wireless added 428,000 net cellular/PCS
customers bringing its nationwide customer base to 25 million.  Subscriber
growth was driven by retail postpaid adds, which represented nearly 90 percent
of total net adds in the quarter.

BellSouth's share of Cingular's revenue was $1.7 billion in the second quarter
of 2004, a gain of 7.3 percent compared to the same quarter a year ago.  Revenue
growth was driven by a 5.1 percent increase in service revenue, which includes a
110 percent increase in cellular/PCS data revenue.  Data revenue grew largely
due to the rising popularity of text messaging, downloadable ringtones, games
and photo messaging.  In part due to increased data revenue in the second
quarter, Cingular saw stabilizing trends in cellular/PCS ARPU (average revenue
per user).  Cingular ARPU was $50.32 down 5.3 percent from the second quarter of
2003 but up 4.9 percent versus the first quarter of 2004.  Operating margins
improved for the second consecutive quarter increasing 220 basis points to 16.4
percent driven by increased ARPU and lower operating costs.

Cingular completed its nationwide network overlay of next-generation GSM/GPRS
technology and is on track to substantially complete its nationwide EDGE
high-speed data deployment by the end of the third quarter of this year.  GSM
provides a strong foundation for deployment of advanced wireless data services
and offers customers the widest selection of handsets in the industry.

Advertising & Publishing

Advertising & Publishing revenue was $511 million in the second quarter of 2004,
a decrease of 2.7 percent compared to the same quarter a year ago.  Operating
margin for the second quarter of 2004 was 48.3 percent, a slight improvement
over the second quarter of 2003.  Segment net income was $150 million compared
to $157 million in the second quarter of 2003.

Discontinued Operations: Latin America Group

In March 2004, BellSouth signed a definitive agreement with Telefonica Moviles,
the wireless affiliate of Telefonica, S.A., to sell BellSouth's interests in its
10 Latin American operations.  The transaction is expected to close in stages as
closing conditions are met, with the closings expected to occur in the second
half of 2004.

Following generally accepted accounting principles (GAAP), the Company's
financial statements reflect results for the Latin American segment in the line
item titled Discontinued Operations.

In the second quarter of 2004, BellSouth reported income from discontinued
operations of 3 cents per share compared to 2 cents per share in 2003.  Income
from discontinued operations was $57 million in the second quarter of 2004.

The BellSouth consolidated Latin American operations added 850,000 customers in
the second quarter of 2004 for a total of 11.5 million customers served at
quarter-end.  Consolidated Latin American operations produced $679 million in
revenue for the second quarter of 2004.

Special Items

In the second quarter of 2004, there were no differences between reported GAAP
Diluted EPS - Income from continuing operations and Normalized Diluted EPS.  The
following table explains a difference in the second quarter of 2003:

                                                                                2Q04          2Q03

GAAP Diluted EPS - Income from continuing operations                            $0.51         $0.49

Pension / Severance*                                                                          $0.01

Normalized Diluted EPS                                                          $0.51         $0.50


*Pension / Severance Costs  - Costs associated with workforce reductions in
2003.



About BellSouth Corporation

BellSouth Corporation is a Fortune 100 communications company headquartered in
Atlanta, Georgia and a parent company of Cingular Wireless, the nation's second
largest wireless voice and data provider.

Backed by award winning customer service, BellSouth offers the most
comprehensive and innovative package of voice and data services available in the
market. Through BellSouth AnswersSM, residential and small business customers
can bundle their local and long distance service with dial up and high speed DSL
Internet access and Cingular(R) Wireless service. For businesses, BellSouth
provides secure, reliable local and long distance voice and data networking
solutions. BellSouth also offers online and directory advertising through
BellSouth(R) RealPages.comsm and The Real Yellow Pages(R).

More information about BellSouth can be found at www.bellsouth.com.

Further information about BellSouth and Cingular's second quarter earnings can
be accessed at www.bellsouth.com/investor.  The press release, financial
statements and BLS Investor News summarizing highlights of the quarter are
available on the BellSouth Investor Relations website starting today at 8 a.m.
Eastern Time (ET).

BellSouth will host a conference call with investors today at 10 a.m. (ET).
Participating will be BellSouth CFO, Ron Dykes, and Investor Relations Vice
President, Nancy Davis.  Dial-in information for the conference call is as
follows:

Domestic:       888-370-1863
International:  706-634-1735

The conference call will also be webcast live beginning at 10:00 a.m. (ET) on
our website at www.bellsouth.com/investor.  The webcast will be archived on our
website beginning at approximately 1 p.m. (ET) today.

A replay of the call will be available beginning at approximately 1 p.m. (ET)
today, through August 2, 2004 and can be accessed by dialing:

Domestic:       800-642-1687 - Reservation number:  7429176
International:  706-645-9291 - Reservation number:  7429176

In addition to historical information, this document may contain forward-looking
statements regarding events and financial trends. Factors that could affect
future results and could cause actual results to differ materially from those
expressed or implied in the forward-looking statements include: (i) a change in
economic conditions in domestic or international markets where we operate or
have material investments which would affect demand for our services; (ii) the
intensity of competitive activity and its resulting impact on pricing strategies
and new product offerings; (iii) higher than anticipated cash requirements for
investments, new business initiatives and acquisitions; (iv) unfavorable
regulatory actions; (v) currency devaluations and continued economic weakness in
certain international markets in which we operate or have material investments;
and (vi) those factors contained in the Company's periodic reports filed with
the SEC. The forward-looking information in this document is given as of this
date only, and, BellSouth assumes no duty to update this information.

This document may also contain certain non-GAAP financial measures. The most
directly comparable GAAP financial measures, and a full reconciliation of
non-GAAP to GAAP financial information, are attached hereto and provided on the
Company's investor relations website, www.bellsouth.com/investor.

For More Information Contact:
LeAnn Hansen, Media Relations at 404-249-2839
BellSouth Investor Relations at 800-241-3419


                      This information is provided by RNS
            The company news service from the London Stock Exchange