AT&T Corp has reported fourth-quarter income from continuing operations of $1.32bn, or $0.81 per share, a solid improvement over a profit of $1.25bn, or $0.77 per share, a year ago. The $0.81 per share beat out the First Call consensus by a solid $0.10. Revenue for the quarter was essentially flat at $12.83bn as a result of decreased revenues from consumer long distance services, which fell 6.8%. Overall long-distance revenue, which includes the consumer and corporate markets, fell 2.3% to $11.39bn, even though calling volume rose 7.2%. For the year, overall long distance revenue was flat on 8.7% volume growth. Wireless revenue grew 4.2% to $1.13bn in the quarter. The bottom line improvement for the quarter is being attributed to the company’s cost cutting efforts, as it has decreased access and interconnection expenses and reduced selling, general and administrative expenses. Operating expenses dropped by $177m, or 1.6%, to $10.79bn for the quarter. SG&A spending dropped to 28.4% of revenue from 29% in last year’s fourth quarter. Consolidated results, which include income from discontinued operations, show fourth-quarter net income down 17.8% at $1.33bn. Year-ago results benefited from a gain of $162m, or $0.10 per share, on the sale of AT&T Capital Corp, as well as income of $0.13 per share from the unit. For the year, consolidated results show net income that fell 21.5% to $4.64bn on revenue up 1.5% at $51.32bn. Earnings per share fell 22.4% to $2.84. On a continuing operations basis, 12-month income was $4.47bn, or $2.74 per share, against $5.57bn, or $3.45 per share, last year. AT&T shares fell $3.8125 to $61.6875, as result of the company’s restructuring announcement (see Top Stories).
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