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AT&T REPORTS FIRST QUARTER RESULTS

 AT&T REPORTS FIRST QUARTER RESULTS
 DALLAS, April 15 /PRNewswire/ -- AT&T (NYSE: T) today reported


first-quarter net income of $883 million, or 67 cents per share, a 16.6-percent increase from $758 million, or 59 cents a share, a year ago.
 Revenues rose to $15.375 billion from $15.274 billion. Operating income increased to $1.442 billion from $1.315 billion in the 1991 first quarter.
 "It was a very good quarter, and a good start to 1992," AT&T Chairman Robert E. Allen said at the communications and computer company's annual shareowner meeting here today.
 "Long-distance calling volume grew a solid 8 percent and revenues from financial services, driven by the continuing success of our Universal Card, rose 32 percent," he said.
 Allen noted that although the U.S. economy appears to be improving, it was not yet helping product sales. A few product business units saw increased sales, he said, but products and systems revenues declined overall.
 In remarks prepared for delivery to shareowners in Dallas' Market Hall, Allen acknowledged the importance of quarterly results but emphasized his commitment to AT&T's long-term financial strength and growth.
 "I view growth as the fundamental means of enhancing the value of our shareowners' investment," he said. "While we must be responsive to current demands and expectations, the decisions we make today will, in large measure, determine tomorrow's harvest.
 "In short," said Allen, "we have to execute in the present, but manage for the future."
 He pointed out that the recent recession is the first AT&T has faced since the breakup of the Bell System in 1984. "While we have not set records, we have demonstrated underlying strength and resiliency," he said.
 "That stems, in part, from the variety of our businesses. Another reason is that, increasingly, our business is linked to international markets, not just to the U.S. We have many eggs, and many baskets, around the world," Allen said.
 "And, even in tough times, people and businesses continue to rely upon communications services -- in some cases, even more than usual."
 In the first quarter, telecommunications services revenues increased a strong 3.3 percent, trailing the rise in long-distance calling volume as customers chose higher-value, lower-priced service offerings made possible by AT&T's increased efficiency. However, the gap between volume and revenue growth continued to narrow compared with previous quarters.
 The higher volume for telecommunications services was led by substantial gains in business services, particularly toll-free 800 and WATS-type calling, with healthy, but lesser, increases in residential and international services.
 Product and system sales were down 6.3 percent overall from first quarter 1991, despite increased sales of microelectronics components, consumer products, wireless and cable systems, and undersea cables.
 Telecommunications network products and systems revenues fell 7 percent to $1.677 billion compared with a year ago as a result of lower sales to some U.S. telephone companies and overseas, largely due to the recession in Europe.
 Revenues from computer products and systems sales declined 16 percent compared with the 1991 first quarter, due to the phasing out of some of AT&T's former computer operations and the continued slump in the computer industry.
 NCR reported continued strong orders, revenues of $1.536 billion and operating income of $46 million in the quarter.
 These results reflected substantial one-time charges associated with the integration of Teradata Corporation following the February 1992 merger; NCR's results also include products and services that were transferred from AT&T Computer Systems. Consequently, 1992 results are not directly comparable to NCR revenues of $1.369 billion and operating income of $90 million in the year-ago quarter.
 AT&T's rentals and other services revenues declined 4.5 percent, reflecting the continued and expected decline in rentals of telephones and other communications equipment.
 Financial services and leasing, which includes the Universal Card and AT&T Capital Corporation, increased dramatically, posting $407 million in revenues compared with $308 million a year ago.
 Total costs decreased $110 million, largely as a result of decreased costs of rentals and other services. Total operating expenses increased $84 million, mainly due to higher selling, general and administrative expenses. That increase was due mainly to acquisitions overseas and the merger with Teradata.
 At the end of the first quarter, AT&T's total workforce was 316,400.
 AT&T
 CONSOLIDATED STATEMENTS OF INCOME
 (Dollars in millions except per share amounts)
 (Preliminary and unaudited)
 Three months ended March 31: 1992(A) 1991(B)
 Sales and Revenues
 Telecommunications services(C) $9,873 $9,560
 Sales of products and systems 3,452 3,686
 Rentals and other services 1,643 1,720
 Financial services and leasing 407 308
 Total revenues 15,375 15,274
 Costs
 Telecommunications services:
 Access and other interconnection
 costs(C) 4,656 4,688
 Other costs 1,747 1,763
 Total telecommunications services 6,403 6,451
 Products and systems 1,981 1,986
 Rentals and other services 729 800
 Financial services and leasing 284 270
 Total Costs 9,397 9,507
 Gross Margin 5,978 5,767
 Operating Expenses:
 Selling, general and
 administrative expenses 3,803 3,692
 Research and development expenses 704 711
 Provision for business
 restructuring 29 49
 Total operating expenses 4,536 4,452
 Operating income 1,442 1,315
 Other income-net(D) 141 95
 Interest expense 203 218
 Income before income taxes 1,380 1,192
 Provision for income taxes 497 434
 Net income $ 883 $ 758
 Earnings per share $ .67 $ .59
 Average shares (millions) 1,319 1,281
 Dividends declared per share $ .33 $ .33
 (A) -- On Feb. 28, 1992, AT&T merged with Teradata Corporation. As a result, AT&T issued approximately 11 million shares of common stock in exchange for the outstanding shares of Teradata not previously owned by AT&T. The merger was accounted for as a pooling of interests; however, the consolidated financial statements of AT&T were not restated due to immateriality. The results of operations for Teradata are included in the consolidated statements of income beginning Jan. 1, 1992, and are not material to AT&T's results.
 (B) -- In September 1991, AT&T merged with NCR Corporation. The merger was accounted for as a pooling of interests; accordingly, the financial statements of AT&T have been restated for all periods prior to the merger to include NCR.
 (C) -- Effective Dec. 31, 1991, AT&T reclassified access and other interconnection costs to cost of telecommunications services to provide a clearer and more typical display of revenues and costs. These costs were previously reported as direct reductions in telecommunications services revenues. This change in presentation had no effect on AT&T's gross margin, operating income or net Income. Previously reported revenues and costs were restated in the new format.
 (D) -- In March 1991, AT&T recognized a gain of $43 ($.03 per share after taxes) from the sale of equity interests in a subsidiary, UNIX System Laboratories, Inc.
 The following is Robert E. Allen's press conference remarks prepared for delivery at the annual meeting in Dallas, on April 15, 1992:
 Good morning, and thank you for coming.
 I think you all were given a copy of the news release with our first quarter earnings.
 It was a very good quarter for AT&T -- and a good start to 1992.
 Earnings were 67 cents per share compared with 59 cents in the same quarter last year.
 Long distance calling volume grew a solid 8 percent. Revenues from financial services -- driven by the continuing success of our Universal Card -- rose 32 percent. Incidentally, we expect the card to be profitable by mid-year, well ahead of the original schedule.
 The U.S. economy finally appears to be improving. We believe this accounts in part for the increase in revenues from services. However, we think the near-term rebound in the economy is likely to be less vigorous compared to the recovery from some past recessions. For example, we don't see much evidence of help from the economy in our product sales. A few of our product units saw increased revenues, but others did not, which led to an overall decline in product sales.
 At the same time, however, I'm gratified by the underlying strength and resiliency we have demonstrated through this recession -- the first we've had to face since the breakup of the Bell System. We now have many eggs, and many baskets, around the world. And even in tough times, people and businesses continue to rely upon communications services -- in some cases, even more than usual.
 AT&T's stock price had that we've got the right people making the right decisions and doing the right things. The analysts expect to see growth in revenues and earnings. And so do I, although, as usual, I won't forecast how much.
 When I meet with our shareowners this morning, I will assure them that I don't dismiss the importance of quarterly earnings. But I will also tell them I am committed to the long-term financial strength and growth of this business. We know we have to execute in the present, but we also have to manage for the future.
 At this my fifth annual meeting as chairman, I will tell shareowners that AT&T's mission has changed. Changed from making affordable telephone service available to all, to being the world's best at bringing people together. Giving people easy access to each other and to the information and services they want and need -- anytime, anywhere.
 This is a vision suitable to the ambitions of a global communications and computer company like AT&T. We have the underlying strengths to carry it off: the powerful AT&T brand; a vast customer base; unmatched R&D capacity in AT&T Bell Labs, and a network that is bigger, more advanced and more reliable -- yes I said more reliable -- than any in the world.
 Before opening this up to questions, I just want to acknowledge that some of our union-represented people are here today expressing their concern about job security and other issues.
 AT&T has a long history of working constructively with the unions. The labor agreement we reached in 1989 broke new ground in establishing family care provisions and in setting up cooperative mechanisms to deal with transfers and training.
 We're back at the bargaining table now, and I'm optimistic that together we will again be able to find creative solutions to the tough issues that we confront.
 Now to your questions.
 -0- 4/15/92
 /CONTACT: Jim Byrnes, 908-221-4011, or at home: 908-689-6040; or Burke Stinson, 908-221-2062 or at home: 201-966-1194, both of AT&T; or at the reach number in the annual meeting press room in Dallas Market Hall: 214-712-1554/
 (T) CO: AT&T ST: New Jersey IN: TLS SU: ERN


TS -- NY015 -- 8512 04/15/92 09:12 EDT
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