AT&T sees its revenue slip
The telecom giant reports a third-quarter dip in revenue of around a billion dollars compared with a year ago, but manages to post income roughly in line with analysts' expectations.
The company on Tuesday reported revenue of $12 billion, down 8.3 percent from a year ago. Net income for the quarter was $207 million, or 5 cents per share, for the three months ended Sept. 30. Excluding one-time events, the company posted a net profit of 6 cents per share, a penny higher than analysts were expecting, according to a survey conducted by First Call.
The company's financial results underwent a number of adjustments, most related to Excite@Home, the high-speed cable Internet company that went bankrupt in 2001, sparking a major legal battle.
The broadband business did reasonably well in the third quarter, with revenue up 8.2 percent on a pro forma basis to $2.5 billion. Revenue growth was mainly driven by advanced services such as high-speed data and digital video.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for that business was $569 million, or $676 million excluding Comcast-related merger costs. The company maintained its previously issued outlook for full-year revenue growth in the low double digits and for 2002 EBITDA of between $2.4 billion and $2.5 billion.
AT&T expects to complete its spinoff of AT&T Broadband and that division's merger with Comcast this quarter. After the merger, AT&T's main business will consist of its phone and data services.
The phone and data business did not do as well. Revenue for the business division slipped 1.6 percent from a year ago to $6.7 billion, while the consumer business plunged 25.9 percent to $2.8 billion. The company pointed to increased competition and to a growing trend of consumers replacing their regular phone service with wireless and Internet services for the decline in the consumer business.
On a conference call, Armstrong, who will be retiring as CEO of AT&T and who will join Comcast as chairman following the merger, bade farewell to the analyst community. He also took a few potshots at some of his competitors who have been undergoing scrutiny of their accounting policies, saying that "the playing field was not level."