AT&T’s Q3 Revenues Slide

By Erin Joyce

AT&T’s earnings before all other charges fell during the third quarter due to continued erosion of its long-distance business but remained in line with previously stated expectations for the period ending Sept. 30th.

The long-distance and cable provider said its cash earnings per share, or earnings before all other charges are factored in, was 4 cents, compared to 35 cents cash EPS during the same, year-ago period.

The cash earnings result was in line with what analysts had expected.

On a reported basis, AT&T said it earned $3.13 per diluted share during the quarter, which included a $13.5 billion after-tax gain ($3.82 per share) after the spin-off if its AT&T Wireless unit. The spin-off was part of AT&T’s plan to break itself into four companies as part of an overall restructuring.

Overall, however, the company’s net loss from continuing operations was $4.4 billion, or 69 cents per share, mainly due to write down and pre-tax charges related to debt reduction measures. During the third quarter of a year ago, AT&T’s net income was $2.4 billion.

Not counting income taxes, equity losses, interest payments on debt and other charges, the company’s net loss for the period was $2.2 billion compared to net income of $1.3 billion in the third quarter of 2000.

AT&T said the 69 cents per share loss was primarily as a result of previously-stated pre-tax charges of about $3.5 billion related to its dissolution of Concert, the one-time joint $10 billion joint venture with British Telecom that was losing about $800 million annually.

The company recorded another charge of $1.8 billion for obligations connected to its stake in AT&T Canada.

Revenues for the period were about $13.1 billion, down about 7.7 percent from the year-ago quarter when it took in $14.2 billion.

The company attributed the drop in revenues to a continued decline in long distance voice services, which was compounded by a softening in the economy.

However, revenues for the AT&T Broadband unit grew by an estimated 15.2 percent (after adjusting for sales of sections of its cable properties and the disposition of other units) to $2.4 billion.

In a separate announcement today, the New York-based AT&T also said it named William Schleyer to head its broadband unit, a move that AT&T chairman C. Michael Armstrong said was good for shareholders and the company entertains bids for its broadband unit and gets closer to making a decision on whether to sell the division.

The AT&T Business data/IP unit took in $6.9 billion, about 4.7 percent less than the same time a year ago.

Shares of AT&T closed down by just over 3 percent to $17.70 before the results were announced.

Numerous reports on Tuesday said that the company was planning a job reduction of about 2 percent of its work force, or about 2,400 jobs.

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