AT&T Wednesday posted third-quarter earnings that fell short of analyst's projections and were 30% lower than a year ago.
The earnings were outlined the same day that the company announced it was spinning off its broadband and business units as separate companies and detailed an overall reorganization. AT&T said it posted earnings of 35 cents per diluted share or $1.319 billion for the quarter ending Sept. 30. Twelve analysts polled expected earnings of 36 cents per diluted share, according to First Call/Thomson Financial in Boston. AT&T posted earnings of 50 cents per diluted share for the same time last year.
Pro forma revenue increased 3.7% to $16.97 billion from $16.33 billion the year before. No revenue estimates were available for the quarter, First Call/Thomson Financial said.
AT&T said the decrease in earnings to 35 cents a share from 50 cents per share a year ago was primarily because of the acquisition of MediaOne Group, including the impact of shares issued and additional interest expense. The decrease was partly offset by AT&T's investment income for the quarter. AT&T's wireless unit saw its revenue grow 36.6% to $2.8 billion, primarily because of growth in its subscriber base. Broadband revenue grew to $2.4 billion, up 10.8% for the quarter. Nearly 600,000 new digital video, telephony and high-speed data service units were added. Business services data and IP services revenue rose to $7.108 billion from $6.937 billion, an increase of 2.5% year-over-year. Operating expenses for the quarter hit $14 billion up from $12.94 billion for the third quarter 1999. Costs increased with the company's focus on its broadband and wireless businesses, along with the MediaOne acquisition. AT&T did see its total assets expand to $213.24 billion up from $130.97 billion. The acquisition of MediaOne and the consolidation of Excite@Home assisted with that upward momentum. The Basking Ridge, N.J. company, however, said its debt rose to $61.78 billion from $35.85 billion, at the end of 1999. This also rose primarily due to the purchase of MediaOne. In early morning trading Wednesday, AT&T's shares traded down $1.81 a share or 6.74% to $25.06 a share. AT&T can be reached at 908-221-2000 or www.att.com/.
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