AT&T revenue slides

AT&T reported third quarter 2002 earnings of $207 million, or $0.05 per diluted share, from continuing operations Tuesday, compared with a loss of $2.2 billion in the third quarter of 2001.

AT&T reported third quarter 2002 earnings of $207 million, or $0.05 per diluted share, from continuing operations Tuesday, compared with a loss of $2.2 billion in the third quarter of 2001.

AT&T’s reported earnings are in line with analysts’ expectations. Revenue for the third quarter was $12 billion, down 8.3% from the third quarter of 2001.

The loss in revenue was offset, however, by an increase in revenues from the AT&T Broadband unit and demand for data, IP, and managed services in the AT&T Business unit.

Revenue for the AT&T Broadband unit grew 6.4% to $2.5 billion from the third quarter of 2001 on demand for telephony, high-speed data, and digital video services. The AT&T Broadband unit provides cable television and broadband Internet services to over 13.6 million U.S. customers.

Last December AT&T agreed to merge the Broadband unit with U.S. cable operator Comcast in a $72 billion deal. Regulatory approval for the merger is expected by the end of the fourth quarter of this year.

Revenue for the AT&T Business unit declined by 1.6% to $6.7 billion from the same period last year, due primarily to the decline in revenue from long distance voice services. AT&T Business sells voice and data services, IP services, hosting and consulting services to U.S. and multinational businesses.

The AT&T Consumer unit reported a decline in revenue of 25.9% to $2.8 billion from the third quarter of 2001. The company blamed the decline on a shift by consumers to wireless- and Internet-based phone service and stiff competition for customers. The AT&T Consumer unit sells long distance and international phone services and dial-up Internet service through the AT&T WorldNet Service.

AT&T is predicting a decline in revenues of between 4.5% and 5% for the year in its AT&T Business unit and more than 20% in the AT&T Consumer unit. Revenue growth of 10% or more is expected for the year in the AT&T Broadband unit. AT&T did not provide year-end guidance for the entire company, in addition to its estimates for each business unit.

The company is looking forward to a business focused on providing communications services following the spin-off of the Broadband unit this year, according to AT&T.