So many people rushed for the exit in AT&T Corp shares yesterday that trading in the stock could not start on time, and when it did open half an hour late, the price plunged $4.625 at $52.625. Cause of the panic was that the company issued a warning that third quarter profits would come in as much as 10% below analysts’ estimates, and that things would not get any better in the final quarter of the year. Putting numbers on it, analysts had been seeking 92 cents a share this quarter, where 82 to 83 cents seems more likely, and that the fourth quarter will likely fall short of the mean estimate of $0.89 per share. The company blames growing competition in its core long distance business, but says its figures were also hurt by investment in local, on-line and wireless services as well as infrastucure to provide new communications and information services. We currently believe that competitive pressures will continue for the remainder of the year, and we are intensifying our marketing efforts, chairman Robert Allen said. While we have succeeded in stabilzing volumes and revenues at last quarter’s levels, the number of customers moving between carriers is still disturbing, he said, adding that Our research indicates that this customer volatility is due largely to price misperceptions that are frequently promoted by some competitors. AT&T’s shares closed at $51.5 yesterday, down 5.63.
