AT&T reports reduced earnings

AT&T has announced pro forma earnings on Wednesday of $0.05 per share for its fourth quarter, down significantly last year's...

AT&T has announced pro forma earnings on Wednesday of $0.05 per share for its fourth quarter, down significantly last year's earnings, but in line with analysts' estimates.

Pro forma revenue for the fourth quarter, adjusted for extraordinary items such as the deconsolidation of results from Excite@Home, declined by 6.1%.

AT&T's reported revenue of $12.59bn (£8.91bn) for the quarter represents a decline of 9.5% over the same period a year ago. Though the company showed a pro forma gain, it will report a loss on continuing operations of $1.39bn (£984m).

The company took a $1bn (£708m) charge against earnings for restructuring in the fourth quarter. AT&T laid off 5,100 employees in 2001 and planning to cut around 5,000 more jobs this year, mainly in its management divisions.

For the full year, AT&T reported earnings of $9.1bn (£6.4bn), reflecting the $13.5bn (£9.5bn ) post-tax gain from the spin-off of AT&T Wireless Services in 2001. 

AT&T is still losing revenue in long distance voice services. However, the company said, the decline in voice service revenue was offset by growth in cable telephony, high-speed data and Internet services, and its local phone service.

The company said it expects long-distance service revenue from business and consumer customers to decline further in 2002, with a slight acceleration in the first quarter of 2002.  

AT&T expects first quarter earnings per share from continuing operations to be in the range of $0.02 to $0.05. 

With an agreement reached in December to sell its cable television business to Comcast and plans to spin off its consumer long distance service as a separate tracking stock, the AT&T of the future will probably look very different.

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