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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: K-MAN who wrote (3170)	12/18/1997 3:16:00 PM
From: SteveG	Respond to of 12468

<A> Ma Bell, With $3.5B On Hand, Is Still Window-Shopping By Shawn Young NEW YORK (Dow Jones)--Ma Bell is loaded and market-watchers are mentally spending her money for her, but there's no indication yet what she will do with the billions she gets from the sale of her credit-card business. AT&T Corp.'s (T) $3.5 billion sale of Universal Card to Citibank, a subsidiary of Citicorp (CCI), will not only bring in cash, but also wipe $5.6 billion in debt off the company's balance sheet. That should leave the New York long-distance giant ready to spend heavily on partnerships and acquisitions, particularly those that can help it break into the local phone market. The ability to offer a full range of communications services, including local, long-distance, Internet and wireless, is crucial to the major companies, and AT&T has been woefully slow to develop a cohesive plan for entering the local market. "The local strategy remains a very important hole to fill," said UBS Securities Inc. analyst Linda Meltzer. "That would argue for an acquisition." The market has been teeming with rumors lately that AT&T would buy Teleport Communications Group Inc. (TCGI), a local company that serves business. AT&T's new chairman and chief executive, C. Michael Armstrong, may spend a few more weeks, if not months, talking with potential partners before choosing from a range of options that includes making acquisitions, creating partnerships with cable and Internet companies, and building parts of a local network itself. The company might even take another run at buying a Baby Bell. AT&T apparently discussed a merger with SBC Communications Corp. (SBC) last spring, but the talks fell apart. The regulatory hostility that helped kill them could be milder now that a merger between MCI Communications Corp. (MCIC) and WorldCom Inc. (WCOM) seems about to create an unrivaled local, long-distance and Internet powerhouse. The sale of Universal Card leaves AT&T in outstanding financial shape. It has been selling off unessential possessions all year, including submarine and satellite assets. Including Universal Card, proceeds for the year come to $6 billion, said company spokeswoman Eileen Connolly. AT&T expects another $641 million next year from the sale of its stake in LIN Television Corp. (LNTV). Meanwhile, the customer care unit of AT&T Solutions is up for sale and the company might also decide to sell its paging operation. Debt for AT&T, which had revenue of $52.2 billion in 1996, was $9.8 billion at the end of this year's third quarter, Cutting that by $5.6 billion will leave the company with its lowest debt ever, Connolly said. The company's NYSE-listed stock has emerged from the pits after reaching a 52-week low of 30 3/4 on April 24. It reached a 52-week high of 59 1/16 Thursday, breaking the previous high set Wednesday. Recently, shares were up 1 1/8, or 1.9%, to 59 on volume of 4.8 million. Average daily volume is 5.4 million. "AT&T is just in a phenomenal position," said one of the many analysts who considers the company underleveraged. "Definitely it's an underleveraged balance sheet that could be exploited, but you get the sense they didn't want to exploit it for the sake of exploiting," said Meltzer of UBS. "With the new leadership of Michael Armstrong, there's a greater confidence that they'll know how to use it."