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AT&T 3Q earnings off 4.5%
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October 25, 1999: 10:20 a.m. ET
But quarterly results beat analysts' forecasts by a penny per share
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NEW YORK (CNNfn) - AT&T Corp. reported Monday that third-quarter operating earnings fell 4.5 percent amid price competition in the consumer long-distance market, but the results beat Wall Street expectations by a penny per share.
AT&T (T), the nation's largest phone company and one of the 30 stocks that comprise the Dow Jones industrial average, earned $1.75 billion, or 54 cents per diluted share, down from $1.84 billion, or 68 cents per share, in the year-earlier period. The results exclude special one-time items.
Analysts polled by earnings tracker First Call anticipated third-quarter earnings of 53 cents per share excluding special items.
AT&T stock rose ¼ at 43-1/4 in early Monday trading.
The New York-based company said the latest results were dragged down by the impact of its recent merger with cable TV company Tele-Communications Inc. Revenue came under pressure in consumer long distance, but were partially offset by gains at its wireless and Internet businesses.
Including one-time items, AT&T posted net income of $1.63 billion, or 50 cents per diluted share, down from $1.99 billion, or 73 cents per share, a year earlier.
Pro forma revenue, which are adjusted to include the company's recent purchase of cable TV company TCI and IBM's Global Network, rose 5.6 percent to $16.3 billion.
Sales of communications services to businesses grew 5 percent to $6.28 billion, while sales in its core residential business fell 4.7 percent to $5.61 billion. AT&T and other long-distance carriers suffered from intense price wars, which pushed long-distance calling rates to as low as 5 cents a minute.
"There's very competitive pricing conditions, but we maintained our strength during the quarter," AT&T chief financial officer Daniel Somers said in an interview with CNNfn. "We had a very good quarter in terms of business volume growth and we have had very good success with our 7-cent consumer plan."
Revenue from cable and Internet business rose 6.7 percent to $1.44 billion. The company is buying MediaOne Group Inc. (UMG) for $58 billion, which would make it the largest U.S. cable television company.
Wireless revenue, adjusted to exclude various purchases and sales, jumped 40.9 percent from the year-earlier quarter.
For the first nine months of the year, net income fell to $4.3 billion, or $1.39 per share, from $4.41 billion, or $1.62 per share, a year earlier. The year-earlier results included a 47-cent per share gain on the sale of discontinued operations.
Revenue rose to $46.06 billion from $39.70 billion.
-- from staff and wire reports
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