- NEW YORK (Reuters) - Long-distance
telephone and cable-television giant AT&T Corp. on Tuesday posted a
$12.7 billion second-quarter loss after charges to write down the value
of some of its assets, and revenues fell as telephone sales and calling
volumes dropped.
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- AT&T and other long-distance telephone companies
have struggled against a glut of communications networks, slack demand
and increased competition from the Baby Bells.
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- But AT&T showed some signs that the worst may be
over. The company said the rate of customers shifting to wireless telephones
and electronic mail -- and away from long-distance calls -- had begun to
stabilize.
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- The New York company expects third-quarter earnings,
excluding one-time items, to be in the range of 3 cents to 6 cents a share.
Wall Street analysts on average expect it to earn 3 cents a share, according
to First Call.
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- AT&T also benefited from the financial woes of rivals
such as WorldCom Inc. WCOME.O , which filed for bankruptcy on Sunday, as
customers looked for alternative service providers.
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- Including $13.1 billion in charges for goodwill and franchise
impairments, AT&T posted a net loss of $3.49 per share. That compared
with a loss of $191 million, or 10 cents a share, a year ago.
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- AT&T, which plans to sell its cable television business
to Comcast Corp. CMCSK.O CMCSA.O , said profit, excluding the one-time
items, rose to 7 cents a share, compared with 4 cents a share, a year ago.
Analysts expected the company to earn 3 cents a share, according to research
firm Thomson First Call.
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- Revenue fell 6.2 percent to $12.1 billion. The company
expects third-quarter revenue to fall at a slightly higher rate than the
drop seen in the second-quarter.
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- Shares of AT&T have fallen 47.5 percent so far this
year. The company plans a one-for-five reverse stock split later this year
to bulk up its stock price.
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- Sales to residential customers plunged 21.8 percent to
$2.91 billion in the second quarter. The company has been hurt as customers
shifted to wireless telephones and Internet services, and away from long-distance
calls. But AT&T said that the rate of wireless and Internet substitution
had begun to stabilize. As a result, it said it expects full-year consumer
revenues to decline at the "favorable end" of the previously
stated mid-20 percent range.
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- Sales to businesses dropped 3.8 percent to $6.74 billion
as lower long-distance voice sales offset growth in data and Internet services.
It said it expects full-year business revenues to drop by 4.5 percent to
5 percent.
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- AT&T Broadband, the cable TV unit, saw revenues drop
1.5 percent as the number of basic video subscribers declined by about
125,000, primarily due to competition, seasonal service disconnects by
customers, and increased apartment vacancies in certain markets.
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