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AT&T 1Q exceeds forecasts
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April 27, 1999: 10:12 a.m. ET
Per-share earnings jump 45.7%, excluding results of TCI acquisition
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NEW YORK (CNNfn) - AT&T Corp. dialed up higher operational earnings in the first quarter, posting results Tuesday that beat Wall Street's expectations.
The nation's largest telephone company said its first-quarter earnings per share, excluding the costs of recently acquired cable television provider Tele-Communications Inc., rose 45.7 percent to 67 cents, from 46 cents in the year-ago period.
The results, which take into account a recent three-for-two stock split, topped the 61 cents a share forecast by analysts surveyed by earnings tracker First Call Corp.
"It's very exciting, these results," Daniel Somers, AT&T's chief financial officer told CNNfn. "We are holding our costs, and that's what fueled the 45 percent increase in the quarter."
Out with old, in with new
Revenue for the New York-based company rose 6.1 percent to $13.61 billion from $12.83 billion a year ago, helped by a focus on wireless operations, where sales grew a record 40 percent. However, revenue at AT&T's flagship long-distance service slackened 3.4 percent, as expected, Chairman C. Michael Armstrong told analysts in a conference call.
The results come one week after AT&T (T) made a $58 billion offer for MediaOne (UMG), exceeding a rival bid from Comcast Corp. to own the nation's fourth-largest cable company. The move would position AT&T within an evolving area of telecommunications where companies offer consumers a bundle of phone, Internet and cable services.
"It gives us the opportunity to be a big player in the U.S. cable market," Somers said of the MediaOne bid. "I think we're very comfortable with it strategically."
Including the effects of the TCI acquisition, completed March 9, AT&T earned $1.72 billion, or 61 cents a diluted share, from operations in the latest quarter. That's up from $1.24 billion, or 46 cents, a year earlier and exceeds another First Call consensus of 57 cents.
Net income, including charges for research and development involving the TCI merger in the latest quarter, fell to $1.08 billion, or 38 cents a diluted share, from $1.30 billion, or 48 cents.
The company carved from the break-up of Ma Bell in 1983 has keen global interests. Nippon Telegraph and Telephone Corp., Japan's dominant telecom operator, said Tuesday it is close to a network alliance with AT&T. The move comes only two days after AT&T took a joint 30 percent stake with its partner British Telecommunications in Japan's fourth-largest telecom carrier, Japan Telecom.
Second-quarter outlook
Looking ahead, Somers told analysts in a conference that second-quarter revenue should grow in the 6 percent range. Earnings, excluding the effects of the TCI acquisition, will be in the 68 to 71 cents per share range, or a 25 to 30 percent gain, Somers predicted.
AT&T shares, up 20.4 percent in the last 52 weeks, rose 2-1/6 to 55 early Tuesday. 
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