FOCUS-AT&T profits fall 42 percent
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NEW YORK, Jan 25 (Reuters) - Long-distance telephone company AT&T Corp. on
Tuesday reported lower fourth-quarter profits but still topped Wall Street expectations, as
acquisition costs and declining consumer sales offset strength in its wireless and cable
television businesses.
AT&T's (NYSE:T - news) earnings fell 42 percent, to $1.15 billion, or 36 cents a share, from $1.99 billion, or 75 cents a
share, a year ago.
Excluding several one-time items, operational earnings were $1.84 billion, or 57 cents a share, down 16 percent from 68 cents
a share a year ago.
The operating results beat Wall Street expectations of 55 cents a share, according to research firm First Call/Thomson
Financial.
Shares of AT&T, the No. 1 U.S. long-distance telephone company, were trading at $51 on the Instinet electronic broker
system, up from a Monday close at $50.50.
Fourth-quarter pro forma revenues grew 5.9 percent, to $16.34 billion from $15.42 billion a year ago.
''Today's results demonstrate we're delivering on our commitments to investors while aggressively executing our long-term
growth strategy,'' said AT&T Chairman C. Michael Armstrong.
''In 2000, we'll continue to be focused on meeting our financial commitments, scaling our broadband and wireless operations,
and accelerating growth throughout our business,'' he said.
AT&T has been expanding in fast-growing businesses such as cable television, data and Internet services to offset its shrinking
consumer long-distance business.
During the fourth quarter, sales to businesses grew 6 percent, to $6.3 billion, while sales to consumers fell 4.5, percent to $5.4
billion.
Wireless revenues, including AT&T's recent acquisition of Vanguard Cellular Systems, increased 41.6 percent to $2.1 billion.
Wireless subscribers grew 33.4 percent to 9.6 million, and average revenue per user increased almost 11 percent to $66.80 a
month. AT&T plans to launch a tracking stock for its wireless operations later this year.
Revenues in the broadband unit, which includes its recent acquisition of cable television company Tele-Communications Inc.,
increased 7.9 percent to $1.5 billion.
AT&T, which is set to become the No. 1 U.S. cable television operator through its planned purchase of MediaOne Group
(NYSE:UMG - news), said it may take an unspecified charge in the first half of 2000 for costs related to its acquisitions and its
plans to cut $2 billion in costs by the end of the year.
AT&T's fourth-quarter operating expenses increased to $13.069 billion from $10.655 billion a year ago due to the acquisitions
of Tele-Communications and International Business Machines Corp.'s (NYSE:IBM - news) global data network.
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