AT&T said loss plummeted to $975 million in first quarter from $1...
AT&T said loss plummeted to $975 million in first quarter from $192 million loss year ago. Carrier blamed loss on declining long distance revenue, accounting change, bad investments. Revenue continued to slide, especially in long distance, to $12 billion,…
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11.3% below $13.6 billion last year. Required change in accounting rules that eliminated amortization of goodwill and franchise costs resulted in charge of $856 million and bad investments in other telecoms were reflected in $580 million pretax charge. Excluding one- time charges and gains, company said it earned 6 cents per share from continuing operations, beating analyst expectations. AT&T shares closed Wed. at $13.75, down 10 cents (0.72%). Central to carrier’s troubles was sharp drop in long distance business due to price wars, increased competition from Bells and customer shift to wireless and e- mail. Consumer long distance division was worst-affected, reporting 22% drop in quarter to $3.1 billion. AT&T said revenue at division would decline “in mid-20% range” for year. Business long distance unit saw 8% decline to $6.5 billion. Company forecast 2-4% drop in 2nd quarter revenue and 7% decline for year. Cable division, AT&T Broadband, said revenue slipped 1.1% to $2.44 billion, although excluding impact of Excite@Home acquisition, revenue grew by 13.9% over year ago. It said 2nd-quarter revenue for AT&T Broadband, which is under contract to be sold to Comcast, would increase 10% over last year. Echoing other major U.S. carriers, AT&T said it would cut this year’s capital spending $300-$400 million in consumer and business divisions to $3.8- $4.2 billion.