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AT&T 4Q income tumbles
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January 30, 2002: 12:48 p.m. ET
Profit before charges tops analysts' estimates; $1B restructuring charge taken.
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NEW YORK (CNN/Money) - AT&T's fourth-quarter profit tumbled, the company said Wednesday, but the results still narrowly topped Wall Street forecasts as the biggest U.S. long-distance provider took a $1 billion restructuring charge.
Investors didn't like what they saw, however, and AT&T (T: down $0.98 to $16.83, Research, Estimates) stock sank nearly 6 percent at mid-session.
AT&T said it earned 5 cents a share in the quarter excluding one-time items, down from 24 cents a share a year earlier. Analysts on average expected a profit of 4 cents a share, according to earnings tracker First Call.
Including charges, the company posted a net loss of $1.4 billion, or 39 cents a share, narrower than the loss of $2 billion, or 52 cents a share, a year earlier.
Sales tumbled to $12.6 billion from $13.9 billion.
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CNNfn's David Haffenreffer reports on AT&T's fourth-quarter results.
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The latest quarter results include a previously announced $1 billion charge to cover one-time costs from 10,000 jobs and other restructuring moves last year. AT&T took another $1.3 billion charge in the period due to adjustments of certain investments and contractual obligations.
"Our results reflect a business managing through a difficult economic and industry-wide climate," CEO C. Michael Armstrong said in a statement. "In the face of these pressures, we remain focused on controlling costs and growing revenue in our growth businesses."
The company, which has been struggling with increased competition, an industry-wide decline in demand and a shift toward high-speed digital connections, took the additional step in December of selling its cable television business to Comcast for $47 billion in stock.
Armstrong said the company passed a "crossover point," producing more revenue from other faster-growing services than from its sluggish long-distance business.
Long-distance voice revenue fell due to weak demand from customers in the travel, financial services, technology and retail industries. Its consumer business saw sales fall 18 percent the quarter as customers shifted toward wireless and Internet connections.
Fourth-quarter revenue at AT&T's cable business rose 10.2 percent. AT&T said it cut debt by about $22 billion in 2001, down to $34.3 billion in the fourth quarter. 
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