AT&T reports $7.1 billion loss
Thursday, October 21, 2004 11:57:17 AM
afxpress.com
WASHINGTON (AFX) -- AT&T said Thursday it lost $7.1 billion in the third quarter, reflecting the company's write-down of the value of its traditional long-distance network in addition to one-time expenses tied to its latest round of layoffs. Sales fell nearly 12 percent to $7.6 billion from a year earlier, though revenue was flat when compared with the prior second quarter, AT&T said. Wall Street was expecting sales of around $7.33 billion
For the third quarter, AT&T reported a net loss of $7.1 billion, or $8.95 a share, compared with income of $418 million, or 53 cents, a year ago. Earlier this month, the company unveiled plans to write down its network and cut an additional 7,000 jobs
Excluding $12.5 billion one-time charges, the company earned $593 million, or 75 cents a share. That figure included a tax benefit of 42 cents a share
Earlier this month, AT&T said it would eliminate more jobs and write down its network assets by $11.4 billion as it tries to cut costs and reorganize amid a retreat from the consumer phone business. The latest round of layoffs resulted in a onetime expense of $1.1 billion, the company said
AT&T recently decided to stop marketing phone service to consumers, citing a series of regulatory setbacks that have made it more difficult to service those accounts
During the third quarter, consumer revenue dropped 15 percent to $2 billion from a year earlier. The company's corporate-services segment experienced a 10 percent decline in sales to $5.6 billion, though revenue held steady from the prior second quarter. AT&T has been under siege for several years as new competitors enter the long-distance market and prices for phone service have fallen. It's now focusing on its corporate-services business and exploring alternative consumer technologies such as Internet phone service
Long-distance rivals MCI and Sprint have adopted a similar approach. Both of those companies also wrote down the value of their long-distance networks this month. By doing so, the carriers can cut amortization expenses and thereby boost reported earnings. On Wednesday, shares of AT&T rose 10 cents to $15.58 |
