There was also positive news however, as the company’s profitability increased from the first quarter of this year, with earnings before interest tax, depreciation and amortisation rising to 23.4% of revenues.
AT&T earned $0.04 per diluted share from continuing operations, excluding other income, asset impairment charges and the effects of the AT&T Wireless exchange, which was at the high end of the company’s forecast. This compares with $0.47 per diluted share from the year-ago quarter.
AT&T reported second-quarter revenue from its continuing operations of approximately $13.33 billion, a 3% decline from the year-ago quarter. AT&T noted that revenue from AT&T Wireless, which is now a separate company, is not included in the company’s total revenue results. The revenue decrease is primarily due to a continued decline in long distance voice revenue, which was partially offset by strong results from AT&T’s Broadband unit and from Business data/Internet Protocol (IP) services. Pro forma revenue from continuing operations, which adjusts for the acquisition of MediaOne, the elimination of per line charges, the consolidation of Excite@Home, and closed cable partnerships, decreased $833 million, or 5.9%, over second quarter 2000.
While our total revenue reflects the impact of the industry-wide decline in long distance voice, we are growing revenue in Business data and IP services and our Broadband business by nearly 14%, said AT&T chairman and CEO C. Michael Armstrong, in a statement to the press. That means later this year, AT&T Business will for the first time reach a crossover point where revenue from growth services will exceed long distance voice revenue, and we are well on our way to full-year revenue growth in the mid-teens in AT&T Broadband.
Since last quarter, AT&T Broadband and AT&T Business have improved their EBITDA margins, excluding other income, as we focus on containing costs and maximizing cash flow, Armstrong added. For example, in Broadband we took a $100 million restructuring charge in the second quarter to further streamline our cost structure. When we exclude the restructuring charge, our Broadband EBITDA margin, excluding other income, was 23.4%.
We also continued to aggressively reduce our net debt by shedding nearly $4 billion in the second quarter. Since the end of June, we have reduced net debt even further to $39.5 billion, and continue to focus on deleveraging as a top priority, added Armstrong.
When we split off AT&T Wireless earlier this month, it had a market cap of more than $40 billion. It’s the first business we launched in our planned restructuring and a good example of the value we expect to unlock for AT&T shareowners, concluded Armstrong
