AT&T Reports Quarterly Loss Of Nearly $1B

AT&T Corp.

AT&T said Wednesday it lost $975 million, or 28 cents per share, in the three months ended March 31, compared to a loss of $192 million, or 10 cents a share, in the year-ago quarter.

Revenue fell 11.3 percent to $12.02 billion from last year's $13.55 billion.

The Basking Ridge, N.J.-based company said long-distance telephone sales continue to be punished by increasing competition from cellular service, e-mail and local telephone carriers that have been steadily gaining federal approval to enter the long-distance market.

A change in accounting methods also accounted for 24 cents of the loss, AT&T said.

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The nation's biggest long-distance carrier said it expects a 1 percent to 2 percent improvement in the rate of revenue decline in the current second quarter.

AT&T said it earned 6 cents a share from its continuing operations, excluding one-time charges and gains. On that basis, it beat expectations for earnings of 4 cents a share by Wall Street analysts surveyed by Thomson Financial/First Call.

Also on that basis, AT&T said it expects its second-quarter earnings to be in the range of 1 cent to 4 cents per share.

AT&T's business unit, which sells long-distance phone service to some of the country's largest corporations, reported an 8 percent decline in revenues, to $6.53 billion.

The company said it expects AT&T Business revenues to decline by 2 percent to 4 percent in the second quarter, and by about 7 percent for 2002.

AT&T's beleaguered consumer long-distance division reported a 22 percent drop in revenues, to $3.13 billion. AT&T said the unit's sales continue to suffer withering competition from Internet and cellular substitution and customers switching to low-priced prepaid calling cards and long-distance plans.

At the same time, AT&T's consumer division entered the local telephone market in Michigan and Georgia, and now provides local service to 1.3 million customers in four states.

AT&T expects revenues at the division to decline "in the mid-20 percent range" for the year.

Even the company's touted cable division, AT&T Broadband, the country's largest cable television provider, reported a revenue decline of 1.1 percent, to $2.44 billion. If the costs related to the acquisition of ExciteAtHome are factored out, the division's revenue increased by 13.9 percent over the year-ago period.

The company said second-quarter revenues at AT&T Broadband, which is under contract to be sold to Comcast Corp., would grow around 10 percent over the same period last year. For all of 2002, AT&T Broadband's revenue ought to grow in the "low double digits," the company said.

AT&T also said it would cut this year's capital expenditures by $300 million to $400 million in its consumer and business divisions, to the range of $3.8 billion to $4.2 billion.

In morning trading Wednesday on the New York Stock Exchange, AT&T's stock was up 14 cents to $13.99.

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