AT&T Loses $1.7 Billion
Monday, January 29th 2001, 12:00 am
By: News On 6
NEW YORK (AP) â€” AT&T Corp. closed out a dismal year with a fourth-quarter loss of $1.7 billion and a 50 percent drop in operating profits, mostly due to costs from its ExciteAtHome and MediaOne cable units.
The fourth-quarter report, which met Wall Street's sharply deflated forecasts, provided a few more specifics on the timing of management's plan to break the nation's largest long-distance and cable TV carrier into three separate companies.
The $1.7 billion loss for the final three months of 2000 amounted to 45 cents per share. In the fourth-quarter of 1999, AT&T posted a net profit of $1.15 billion, or 36 cents per share.
Excluding one-time factors such as the MediaOne acquisition and the financial restructuring of ExciteAtHome, AT&T's operations saw a fourth-quarter profit of $978 million, or 26 cents per share. In the same period a year earlier, operating profits totaled $1.72 billion, or 53 cents per share.
Fourth-quarter revenues rose 3 percent to $16.9 billion, up from $16.4 billion in the same period in 1999.
AT&T Wireless was again the star performer for AT&T, posting a 39.1 percent increase in revenues to $3.0 billion, helping offset the continuing decline in long-distance calling revenues. The unit, due to be spun off as an independent company in the breakup, added 865,000 subscribers during the quarter to end the year with 15.2 million customers.
The cable operation, AT&T Broadband, posted an 11.8 percent gain in fourth-quarter revenues. The high-speed Internet service had 1.1 million subscribers at year end, up 259,000 for the quarter. The company signed on about 210,000 customers to receive telephone service via cable, ending the year with 560,000 subscribers.
Fourth-quarter revenues from business services, another trouble spot throughout the year, rose just 0.7 percent to $7.1 billion compared with the same operations last year.
Revenues in the consumer unit, which included long distance and the dial-up Internet business, fell 14.7 percent to $4.3 billion, weighed down by the ongoing defection of customers to competing alternatives such as wireless phones and Internet-based calling, as well as rival offerings from the Baby Bells in New York and Texas.
For all of 2000, AT&T had a net profit of $3.10 billion, or 88 cents per share, down from $5.45 billion, or $1.74 per share, in 1999. Full-year operating profits came to $1.63 per share, a decline of 22 percent compared to 1999.
In terms of the breakup, AT&T said it expects to make a stock swap offer in early March for shareholders to exchange regular AT&T shares for AT&T Wireless shares. Following the exchange offer, AT&T plans to distribute its remaining wireless shares to AT&T shareholders and spin the business off in mid-2001.
The company also said it expects the initial public offering of stock in AT&T Broadband to occur in the fall. The new ``tracking'' stock representing AT&T's consumer business is expected to be distributed to shareholders in the third quarter of 2001.