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News > Companies
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AT&T meets forecasts
graphic October 23, 2001: 7:12 p.m. ET

No. 1 long-distance phone provider posts a sharply lower profit.
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  • AT&T to cut 2,400 jobs - Oct. 23, 2001
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    NEW YORK (CNNmoney) - AT&T Corp. on Tuesday posted third-quarter results that met Wall Street expectations while citing a softening economy and September's terrorist attacks for a falling profit.

    New York-based AT&T (T: Research, Estimates)  reported third-quarter income from continuing operations of 4 cents a diluted share, excluding other income and charges, compared with 35 cents for the same time period last year. Earnings tracker First Call expected 4 cents a share for the quarter.

    AT&T confirmed earlier Tuesday that it would cut 2,400 jobs.

    Cash earnings were 16 cents. AT&T earned $3.13 a diluted share in the third quarter, on a reported basis, which includes a $13.5 billion after-tax gain, or $3.82 a share, due to the spinoff of  AT&T Wireless.

    The nation's No.1 phone provider said it expects to take a fourth-quarter restructuring charge related to cost-control initiatives taken mostly at AT&T business. The company did not quantify or detail impacts of the charge.

    A softening economy and the terrorist attacks of Sept. 11 will impact key market sectors that AT&T serves throughout fourth quarter and 2002, the company said.

    "The Sept.11 attack was layered on an already weak economy," said AT&T CEO Mike Armstrong on a conference call open to analysts and reporters. "This is impacting our core businesses. AT&T is seeing a mirroring of the U.S. economy."

    Armstrong later added that any signs of a rebound for the U.S. economy and AT&T's businesses will likely not come before the second half of 2002.

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    AT&T sees fourth-quarter earnings from continuing operations to be 3 cents-to-6 cents a share, while cash earnings will be 14 cents-to-17 cents a share, excluding charges and other income. Earnings before taxes, excluding charges, will be in the range of $3.4 billion-to-$3.6 billion.

    First Call expects 4 cents a share in the fourth quarter.

    Revenue dropped to $13.1 million from $14.2 million last year, which AT&T said is due to the decline in long-distance voice services and the softening economy. AT&T expects to cut capital expenditures by 20 percent in 2002, the company said.

    AT&T said $400 million in charges were due to Excite At Home, the troubled high-speed Internet service provider.

    AT&T segments vary

    Margins for AT&T Broadband increased by 8.1 percentage points compared with 25.2 percentage points. Revenue grew by 15.2 percent to $2.4 billion. The cable business added 43,000 new subscribers during the quarter.

    Revenue for AT&T business dropped 4.7 percent to $6.9 billion due to the decline in long-distance voice services. Margins for the unit fell to 14.6 percent.

    AT&T Consumer posted a 17 percent drop in revenue to $3.8 billion. graphic

      RELATED STORIES

    AT&T to cut 2,400 jobs - Oct. 23, 2001





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