AT&T reports a loss on tumbling revenues, cost of job cuts

Posted 12:07PM on Wednesday 30th January 2002 ( 22 years ago )

NEW YORK - AT&T Corp. reported a smaller fourth quarter loss, as the telecommunications giant continued to struggle with tough competition in the long-distance telephone market, its mainstay. For the quarter ended Dec. 31, AT&T lost $1.39 billion, or 39 cents a share, compared with a loss of $1.64 billion, or 45 cents a share, a year before. The fourth quarter losses include a $1 billion writedown related to the cutting of 10,000 jobs at the nation's largest long-distance carrier and cable television provider. Revenues fell 9.5 percent, to $12.59 billion from $13.91 billion in the year-ago quarter. Excluding the writedown and other one-time items, AT&T posted operating income of $211 million, or 5 cents per share, beating the 4 cents per share consensus estimate of Wall Street analysts polled by Thomson Financial/First Call. "Our results reflect a business managing through a difficult economic and industrywide climate," said AT&T chairman C. Michael Armstrong. In December, AT&T announced it would sell its successful cable business, AT&T Broadband, to Comcast Corp. for nearly $50 billion. The deal requires regulatory approval, but the companies hope to complete it by the end of the year. The coming year looks none too bright for AT&T. The company said it expects its overall rate of revenue decline in the first quarter to increase slightly beyond the fourth quarter drop of 9.5 percent and estimates first quarter earnings from operations in the range of 2 cents to 5 cents per share. Revenues in the consumer long distance business are expected to decline in 2002 in the mid-20 percent range, with earnings in its business unit also falling around 3 percent beyond the 2001 drop. The company expects the decline in phone revenues to be offset by earnings in its cable unit, with revenue predicted to grow in 2002 in the low- to mid-teens. For all of 2001, AT&T earned profits of $9.15 billion, or $2.50 per share, compared with a profit of $3.18 billion, or 88 cents a share, a year ago. Full-year revenue was $52.55 billion versus $55.53 billion in 2000. In morning trading Wednesday on the New York Stock Exchange, shares of AT&T fell nearly 6 percent, or $1.05, to $16.76.

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