Broadband, Wireless Boost AT&T Results
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AT&T Corp. Tuesday reported it attained a 5.8 percent increase in its earnings over comparable first quarter results in 1999.
AT&T (T) reported first quarter revenues of $1.7 billion, or $0.54 per diluted share, compared to $0.38 per diluted share, or $1.1 billion, during the first quarter of 1999.
AT&T's operational earnings, which exclude certain gains and charges as well as the impact of certain ownership interests, were $0.53 per diluted share, or $1.732 billion, lower from the year-ago quarter of $0.61 per diluted share or $1.717 billion.
AT&T attributed the drop in operational earnings to pro forma effect of the company's acquisitions of TCI and the IMB Global Network, respectively dubbed AT&T Broadband and AT&T Global Network Services.
C. Michael Armstrong, AT&T chairman and chief executive officer, said AT&T's growth reflects that its businesses are delivering services customer's demand.
"We'll continue to cut costs in our legacy businesses while ramping up our high-growth businesses," Armstrong Said.
"Wireless revenue grew more than 40 percent and we now have nearly 10 million subscribers," he continued. "In Business Services, our high speed data and Internet protocol revenue grew at a high-teen rate and AT&T Solutions posted a 25 percent increase in revenue."
Armstrong noted that its broadband service leads the industry as AT&T possesses nearly 2 million digital cable customers, adding an average of 3,000 new customers per day.
"Our Consumer business margins continue to generate significant cash flow to reinvest in our growth businesses and our local market entry efforts are getting strong customer response," Armstrong concluded.
AT&T's first quarter earnings report detailed its earnings on Business Services Revenue at $7.1 billion and Consumer Services Revenue accounting for $5.1 billion. It's Wireless Services Revenue totaled $2.2 billion in the first quarter while its AT&T Broadband services posted $1.5 billion in earnings.
AT&T first quarter earnings further reported that its wireless telecommunications division provides services to 13.1 million subscribers, up 30 percent over the same period of 1999. The customer based includes integration of clients purchased in its acquisition of Vanguard Cellular Systems in 1999.
The telecom giant's 1999 revenue was adjusted for the pro forma impact of the TCI acquisition and for all closed cable transactions with Excite@Home, but excluded certain gains and charges from AT&T's ownership interests in Cablevision Systems Corp. (CVC) and Excite@Home (ATHM).
AT&T announced it recorded a pretax charge of $773 million against first-quarter earnings, reducing net income by $477 million. The charge includes $682 million relating to business unit downsizing, which includes severance costs for approximately 6,200 employees, nearly all of which are from the company's traditional business venues.
AT&T employees have been notified and will be leaving the company by the end of the year. Thec