SBC Communications coupled its announcement today of lower earnings with the promise of 7000 additional job cuts. But the company actually exceeded analysts’ expectations of its earnings per share, after taking into account its share of the costs of Cingular’s merger with AT&T Wireless.

Thomson First Call said the analyst consensus expectation for SBC was 33 cents a share, before announced one-time charges, and the company came in with EPS at 34 cents.

SBC reported a diluted fourth-quarter EPS of 23 cents per share, down 16.7% over the fourth-quarter of 2003 after one-time charges which included five cents per share for severance payments and management pension plan changes, eight cents per share for $396 million in Cingular merger costs and a favorable tax adjustment of two cents per share.

SBC reported an increase in wireline revenue of 3.6 percent, despite losing 266,000 lines in its core local phone line business. The pace of lost wireline customers slowed in the fourth quarter, the company said, both from the third quarter of 2004 and the fourth quarter of 2003.

The increased revenue in the wireline business was attributed to additional sales of business services and service bundles, both of which generate more revenue than basic phone lines.

SBC said it has now sold additional services – long-distance, DSL, DISH satellite or joint billing of Cingular Wireless – to 61 percent of its local voice customers, up from 44 percent a year ago. Its wireline data revenues grew 10 percent to $11 billion and its revenue from large business customers grew five percent over the fourth quarter of 2003.

Also on the positive side, the company also reported an addition of 425,000 DSL lines added to reach 5.1 million in service and 1.1 million new long distance lines to reach 20.9 million in service.

SBC Chairman Edward Whitacre promised a disciplined approach in 2005 that will produce higher revenues, improved margins and solid cash flow. “I am very positive about 2005,” he told analysts in a conference call.

The 7000 jobs to be cut will occur predominantly by attrition, company officials said.