Shares of AT&T jumped higher today after the long distance telephone giant announced that third-quarter operational profits, excluding charges, grew by 66.7 percent, helping the company surpass Wall Street expectations.
The company said that total revenues from its business services units, led by growth in high-speed data services, increased to $5.8 billion, a rise of $262 million, or 4.7 percent, compared with the year-ago quarter.
AT&T's business and wireless services, and international operations helped offset slightly declining AT&T consumer services revenue. AT&T said that total revenue for the quarter increased 4.3 percent to $13.65 billion, compared to $13.1 billion in the third quarter of 1997.
Revenue from wireless services rose $230 million to $1.420 billion, an increase of 19.4 percent from the third quarter of 1997. Revenue from consumer services decreased $171 million, or 2.9 percent compared with the third quarter of 1997. Total revenues for the third quarter were $13.653 billion, an increase of 4.3 percent compared with the $13.09 billion reported for the third quarter of 1997.
The company posted operational profits of $1.00 per share, compared to year-ago earnings of 60 cents per share, excluding a pension settlement gain and merger-related expenses. AT&T's total revenue rose 4.3 percent for the third quarter. A consensus of analysts expected the company to earn 95 cents per share, according to First Call.
AT&T stock was up 1.08 percent, or 69 cents, to 64.5. The company's shares have traded as high as 68.5 and as low 43.69 during the past 52 weeks.
Revenue from the company's online services, including WorldNet, increased 65.1 percent to $100 million vs. $61 million reported for the year-ago quarter.
During the third quarter, the company announced additional cross-marketing agreements with leading Internet search engines companies, including Yahoo, Excite, Lycos, and Infoseek.
AT&T also reported last week that it is on track with its timetable for its merger with Tele-Communications Incorporated and has completed all initial U.S. regulatory filings, including those with the Federal Communications Commission, the Justice Department, eight states, and 940 local jurisdictions.
The company also announced that it has filed confidentially with the Securities and Exchange Commission a preliminary proxy and prospectus. After SEC review, the company said it expects to make the proxy publicly available and send it to all AT&T and TCI shareowners.
"We are aggressively moving forward with our merger plans," said AT&T chairman Michael Armstrong. "Presuming shareowner and regulatory approvals, we expect to close the TCI merger in the first half of 1999."
AT&T also said that it had reached a definitive agreement with British Telecommunications on the final terms of the global joint venture announced last July. The company said that it expects to complete the initial filings of the appropriate documentation with regulatory authorities in the United States and Europe next week.