BellSouth, which cut operating expenses by $21 million and capital spending by $369 million, or 37 percent, is back in the black.

BellSouth (NYSE: BLS) reported earnings of 66 cents per share for the first quarter on revenues of $5.52 billion. Revenues were $5.53 billion for the same quarter a year earlier.

The company also said it cut $753 million in debt during the quarter.

In its first quarter of offering long distance services across all its territories, BellSouth said it signed 1.9 million business and individual customers. The company also added 101,000 DSL customers, improving its broadband customer total to 1.12 million.

Despite those increases, BellSouth reported a 3.6 percent decline in total access lines and a 2.2 percent drop in communications group revenue to $4.6 billion when compared to 2002 figures.