AT&T Tops Estimates; Announces Restructuring
AT&T, the biggest U.S. long-distance telephone company, said today its third-quarter earnings fell 12 percent, but topped Wall Street’s reduced expectations, as declining long-distance sales to residential customers offset strong wireless and data sales.
As New York-based AT&T unveiled a complex reorganization, the company said profits, excluding one-time items, fell to $1.44 billion, or 38 cents a share, compared with $1.63 billion, or 50 cents a share, a year ago.
The results beat Wall Street’s tempered forecast of 36 cents a share, according to research firm First Call/Thomson Financial. AT&T in May cut its growth forecasts for the rest of the year, citing faster-than-expected declines in sales of telephone services to residential customers and sluggish sales to corporate customers.
Including one-time items, AT&T’s third-quarter net income fell 19 percent to $1.32 billion, or 35 cents a share. Revenues rose 4 percent to $16.98 billion.
Sales of communications services to consumers fell 11 percent to $4.67 billion as AT&T continued to suffer from increased competition and price wars. Sales to corporate customers rose 2.5 percent to $7.11 billion. The company added 750,000 wireless subscribers from a year ago. Cable-based telephone subscribers totalled 350,000 in the third quarter, up from 224,000 in the second quarter. BACK TO TOP
Viacom’s Profits Fall
Viacom reported today third-quarter earnings that topped expectations amid strong advertising growth at the media and entertainment giant, but profits were down from a year earlier, reflecting higher taxes and costs from its CBS purchase.
The New York-based company, whose properties include the MTV cable network and Paramount Studios, said net income dropped to $33 million, or 2 cents a share, from $97 million, or 14 cents, in the same period last year.
Analysts on average had expected the company to post a loss of 2 cents a share, according to First Call/Thomson Financial.
Revenues rose 79 percent to $6 billion from $3.3 billion, powered by strong advertising revenue growth, especially at CBS, the broadcaster that scored a big hit with the TV show Survivor, and its cable and radio operations.
“The quarter was fueled by double-digit ad sales growth across the board, spurred by such ratings triumphs as CBS’ Survivor, which generated significant prime-time audience gains at CBS, and MTV’s Video Music Awards, this year’s highest-rated cable entertainment program,” Sumner Redstone, Viacom chairman and chief executive said in a statement.
Pro forma revenues, which take into account the CBS acquisition, rose 7 percent to $6 billion from $5.6 billion in the third quarter of 1999. Pro forma revenues at the company cable networks rose 13 percent to $1 billion, led by double-digit increases in ad revenues at MTV.
Infinity Broadcasting, in which Viacom acquired a majority stake when it took over CBS, posted pro forma revenues of $1 billion, up 12 percent on the year
Television pro forma revenues were also boosted by strong ad revenue growth, up 3 percent to $1.8 billion.
The company’s entertainment division saw more moderate growth of 2 percent to $792 million. Merrill Lynch analyst Jessica Reif Cohen had forecast slower entertainment revenue growth because of weaker attendance at Paramount Parks because of rainy weather conditions.