AT&T profit tops estimates, shares leap $3.20, or 23%

April 24, 2003|By BLOOMBERG NEWS

NEW YORK -AT&T Corp. posted a first-quarter profit yesterday that topped forecasts as expenses fell and sales declines eased. The shares surged 23 percent.

Net income at the biggest U.S. long-distance telephone company was $571 million, or 73 cents a share, compared with a loss from continuing operations of $410 million, or 56 cents, a year earlier, when asset write-downs depressed results. Revenue slipped 5.9 percent to $8.99 billion, the smallest percentage drop in nearly two years.

AT&T said it will meet or exceed a January forecast for a less-than-10 percent decline in annual sales. Chief Executive Officer David Dorman is fighting a shrinking U.S. long-distance market by giving his salespeople extra commissions for taking business from rivals such as WorldCom Inc., which has been operating under bankruptcy protection.

"They've missed in every darn quarter in recent memory, so for them not to miss on the downside is perhaps an inflection point," said Ed Paik of Columbia Management Co. "The longer-term view is still extremely cautious for the company."

Excluding a 6-cent benefit from an accounting change, profit rose to 67 cents a share, helped by a tax gain, AT&T said. Analysts had expected the company to earn 52 cents on sales of $8.89 billion.

AT&T's shares jumped $3.20 to $17.01 on the New York Stock Exchange yesterday. The stock is down 47 percent this year, making it the worst performer in the Standard & Poor's 500 index.

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