AT&T reaches out to Armstrong
Ending a three-month headhunt, AT&T names Hughes Electronics chairman C. Michael Armstrong as chairman and CEO.
The company also named AT&T vice chairman and acting chief, John D. Zeglis, as president.
=""> After a 40-year career at AT&T, Robert Allen, 62, will resign November 1 as chairman, CEO, and director. He will serve as chairman of the board's executive committee until his retirement at the end of February.
Zeglis, who was Allen's first choice to succeed him, was promoted to president with the tacit assurance that he will succeed Armstrong in three years. During Zeglis's three months at the helm, AT&T stock continued to rally through report after report that he was a contender for the top job.
Beset by increasing competition in its core long-distance market and facing possible industry mergers with the GTE and WorldCom takeover bids of MCI, AT&T could ill afford another unsuccessful headhunt. Last July, John R. Walter became the second president and heir-apparent to quit in less than a year.
By coupling Armstrong and Zeglis in the top posts, the board managed to retain a knowledgeable insider while satisfying investor demand that an experienced leader be put in charge of the struggling giant.
Meanwhile, the company said it had third-quarter net income, from continuing operations of $1.15 billion, or 71 cents per share on revenue of $13.38 billion, topping First Call estimates of 65 cents a share. The year-ago quarter's earnings were $1.35 billion or 84 cents a share on revenue of $13.228 billion.
Separately, the company said it expects to complete the sales of its Universal Card and Solutions Customer Care units by mid-1998.