Bezeq ended its run as a state-owned company on a stable note, posting third quarter numbers that were largely in line with expectations. The telecommunications company, whose sale to the Apax-Saban-Arkin consortium by the government was completed last month, posted operating earnings of NIS 350 on revenue of NIS 2.84 billion, up from NIS 346.5m. and NIS 2.47b. a year earlier. Net profit, however, was cut by more than half because of a NIS 145m. one-time gain recorded in the 2004 quarter, the company said Wednesday. Net Income for the three months ended September dropped to NIS 103 million from NIS 243m. in 2004, while earnings per share (EPS) fell to 4 agorot, from 9 agorot. "The results were relatively meaningless and in line with expectations," said Richard Gussow, an analyst at Excellence Nessuah who has a "buy" recommendation on the stock. "The market is more interested in what the new owners will do, and we expect to see the more significant changes implemented next year." Following the announcement, Bezeq shares dropped 2.9% to NIS 6.16 in Tel Aviv. For the first nine months of the year, the group's net income was NIS 547m., compared to NIS 517m. for the same period last year, while EPS grew to 21 agorot, from 19.8 agorot year-over-year. Revenue for the nine months jumped 29% to NIS 8.34b., from NIS 6.49b. Newly appointed Bezeq CEO Ya'acov Gelbar said the company's transition to a private company was accompanied by earnings that showed continued growth in all areas. "We are a building a new strategy with our shareholders to advance Bezeq as the leading telecommunications company in Israel, while guarding our strong financial standing," he said. Bezeq is facing increased competition from various cellular companies and Internet providers, who are planning to launch local calling service using Voice over Internet Protocol (VoIP) technology in 2006. The company's monopoly in the fixed-line market was broken a year ago when cable company HOT Telecom launched its service. Bezeq said in its report that competition with HOT is increasing, where the cable is able to provide bundled telephone and cable TV services, which Bezeq is not able to do until it loses more than 15% market share. Gussow said the main concern at the company was 'Yes' which continues to lose money, posting a net loss of NIS 244m. for the first nine months of 2005. Yes's revenues have grown 19% to NIS 896m. so far this year. Pelephone continues to be the cash cow for the group with a slight increase in revenue to NIS 3.35b. for the nine-month period. The cellular company's net income, however, dropped to NIS 203m. from NIS 232m. due to inflationary effects on financing in the third quarter. Net income for Bezeq International fell to NIS 86m. from NIS 95m. for the nine months while revenue fell 1.6% to NIS 604m.