Printer Friendly

AT&T REPORTS RECORD QUARTERLY AND ANNUAL PROFITS

 NEW YORK, Jan. 28 /PRNewswire/ -- AT&T (NYSE: T) today reported record fourth-quarter net income of $1 billion, or 75 cents per share, on revenues of $17.504 billion, compared with year-ago net income of $635 million, or 48 cents a share, on revenues of $16.463 billion.
 As previously reported, both quarters' profits included reductions -- by 3 cents a share in 1992 and 14 cents a share in 1991 -- in the book value of AT&T's investment in an Italian holding company, Compagnie Industriali Riunite S.p.A.
 "Our strong fourth quarter helped make a banner year for AT&T," said Chairman Robert E. Allen. "All parts of our business contributed to these hard-won results in a slow-growth economy."
 Net income for all of 1992 was $3.807 billion, or $2.86 per share, on revenues of $64.904 billion. In 1991, when the company took a total of $4.5 billion of restructuring and other charges, net income was $522 million, or 40 cents a share, on revenues of $63.089 billion. Excluding those charges and some one-time gains, net income was $3.242 billion or $2.51 a share in 1991.
 The $1.04 billion growth in total revenues for the quarter -- an increase of 6.3 percent over a year ago -- came mainly from product sales, aided by strong growth in financial services and higher rentals and other services.
 Quarterly, Annual Results In Brief
 -- In telecommunications services, long-distance calling volumes in the quarter rose about 5 percent. Revenues were down 0.7 percent compared with a year ago, primarily because of business customers choosing lower-priced, higher-capacity dedicated lines, as well as adjustments to revenue estimates for prior periods. For all of 1992, long-distance volumes grew about 6 percent while revenues grew 2 percent.
 -- In products, revenues rose 20 percent from the 1991 fourth quarter. The telecommunications network switching business led the list of AT&T units that saw big improvements. Other units with increases included those that provide cable, operations and transmission systems for communications-services providers; phone systems for large and small businesses; microelectronics components, and consumer products. For the year, product revenues rose 3.3 percent.
 -- AT&T Universal Card Services, which was profitable for the year, contributed greatly to a 37-percent jump in financial-services revenues over the year-ago quarter.
 -- NCR posted higher operating income and strong orders in the quarter; for the year, revenues reached $7.135 billion.
 Results In Detail
 Telecommunications Services: Healthy gains in toll-free 800 services for business led the growth in long-distance volumes. Other domestic and international business and consumer services also saw increases.
 Products and Systems: Strong results in this category included an 18-percent increase to $1.9 billion for the year in international sales of network telecommunications products and systems, and sharply increased sales of AT&T micro-electronics components to original equipment manufacturers.
 The company's consumer products business reported record sales for the quarter, while sales of phone systems for large and small businesses also were up in year-end buying.
 At NCR, total revenues, which include sales to other AT&T units, were $2.146 billion for the quarter; operating income was $94 million. In the 1991 fourth quarter, revenues were $2.000 billion, and operating income was $76 million. (NCR's fourth-quarter 1992 figures include results from Teradata, which merged with AT&T early last year.)
 NCR continues to report strong orders in the United States and Latin America, but orders in other geographic areas remained weak.
 Financial Services: Revenues in this category were $577 million for the quarter, compared with $420 million a year ago, as Universal Card and AT&T Capital Corporation, the unit that leases and finances equipment, continued to do well. For all of 1992, revenues in this category rose to $1.894 billion.
 Rentals and Other Services: Revenues gained 2.8 percent for the quarter and were flat for the year, as strong growth of other services and the benefit of the DATAID acquisition by AT&T ISTEL offset a continued and expected decline in rentals of telephones and other communications equipment.
 Costs and Expenses: Total costs increased $679 million in the quarter, and $885 million for all of 1992, largely as a result of higher sales of products and systems, and growth in financial services. Access and other interconnection costs declined $263 million for the year.
 Selling, general and administrative expenses rose slightly for the quarter primarily because of increased sales expense, but declined as a percent of sales.
 Research and development expense declined $203 million for the year, mainly because of streamlining of research efforts for telecommunications network products and systems, and consolidations resulting from the NCR merger. Interest expense was reduced $63 million during all of 1992.
 AT&T's total workforce at the end of 1992 was 312,700, compared with 317,100 at the end of 1991.
 Chief Financial Officer Alex J. Mandl will discuss AT&T's fourth-quarter and full-year results in a conference call for financial analysts at 11 a.m. EST today. Reporters may access the call by dialing 1-800-424-9750. The call will be rebroadcast over the same number at 3 p.m. EST today and at 11 a.m. EST on Friday, January 29.
 AT&T CONSOLIDATED STATEMENTS OF INCOME
 Dollars in millions except per share amounts
 Periods ended Three Months Twelve Months
 Dec. 31 1992(A) 1991 1992(A)(B)1991(C)
 Sales and Revenues
 Telecommunications services $9,724 $9,792 $39,580 $38,805
 Sales of products and systems 5,306 4,405 16,473 15,941
 Rentals and other services 1,897 1,846 6,957 6,959
 Financial services & leasing 577 420 1,894 1,384
 Total revenues 17,504 16,463 64,904 63,089
 Costs
 Telecommunications services:
 Access and other
 interconnection costs 4,440 4,508 18,132 18,395
 Other costs 1,777 1,720 7,135 6,881
 Total telecommunications
 services 6,217 6,228 25,267 25,276
 Products and systems 3,181 2,597 9,846 9,134
 Rentals and other services 908 861 3,287 3,344
 Financial services and leasing 370 311 1,310 1,071
 Total costs(D) 10,676 9,997 39,710 38,825
 Gross margin 6,828 6,466 25,194 24,264
 Operating expenses
 Selling, general and
 administrative expenses 4,376 4,318 15,950 16,220
 Research and development
 expenses 707 776 2,911 3,114
 Provision for business
 restructuring(D) 25 6 64 3,572
 Total operating expenses(D) 5,108 5,100 18,925 22,906
 Operating income 1,720 1,366 6,269 1,358
 Other income-net(D)(E) 8 (134) 352 208
 Gain on sale of stock
 by subsidiary(F) 0 0 0 43
 Interest expense 163 191 663 726
 Income before income taxes 1,565 1,041 5,958 883
 Provision for income taxes 565 406 2,151 361
 Net income $1,000 $635 $3,807 $522
 Earnings per share $.75 $.48 $2.86 $.40
 Average shares (millions) 1,342 1,310 1,332 1,293
 Dividends declared per share $.33 $.33 $1.32 $1.32
 (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) -- Postretirement benefits for the first three quarters of 1992 were reclassified based on information that became available in connection with preparations for the adoption of Statement of Financial Accounting Standards No. 106 in the first quarter of 1993. The reclassifications had no effect on operating income or net income.
 (C) -- In September 1991, AT&T merged with NCR Corporation. The merger was accounted for as a pooling of interests and, accordingly, the financial statements of AT&T have been restated for all periods prior to the merger to include NCR.
 (D) -- Other income-net for the three months and the 12 months ended Dec. 31, 1992, includes a pre-tax loss of $68 ($44 or $.03 per share after taxes) to further reduce the carrying value of AT&T's investment in Compagnie Industriali Riunite S.p.A. (CIR) due to a sustained decline in CIR's market value.
 The 12 months ended Dec. 31, 1991, includes approximately $4,500 of business restructuring and other charges which reduced net income by $2,863 or $2.21 per share. The charges were for changes in AT&T's computer operations; for restructuring PBX operations and product- distribution processes; for consolidating operations in leased and owned buildings and recognizing costs of vacant space; for eliminating a future subsidy to an Alaskan long- distance company; for writing down the carrying value of AT&T's investment in CIR, and for other restructuring activities, merger- related expenses and other charges. The charges were recorded as a $3,572 provision for business restructuring; $501 of selling, general and administrative expenses; $123 as cost of products and systems, and the remainder as other costs and expenses, including other income-net. The three months ended Dec. 31, 1991, includes the writedown of AT&T's investment in CIR and business restructuring charges which reduced net income by $177 or $.14 per share.
 (E) -- The 12 months ended Dec. 31, 1991, includes a pre-tax gain of $171 ($.08 per share after taxes) on the sale of AT&T's equity interest in Sun Microsystems, Inc.
 (F) -- In March 1991, AT&T recognized a pre-tax gain of $43 ($.03 per share after taxes) from the sale of stock by a subsidiary, UNIX System Laboratories, Inc.
 -0- 1/28/93
 /CONTACT: Jim Byrnes, 908-221-4011, or at home: 908-689-6040, or Dick Gray, 908-221-5057, or at home: 908-232-3706, both of AT&T/
 (T)


CO: AT&T ST: New York IN: TLS SU: ERN

TS -- NY009 -- 0043 01/28/93 08:18 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jan 28, 1993
Words:1683
Previous Article:DURACELL REPORTS STRONG SECOND QUARTER GROWTH FROM OPERATIONS; PRE-TAX INCOME UP 11 PERCENT; HIGHER TAX BITE PARES NET INCOME ONE PERCENT
Next Article:AIRGAS, INC. REPORTS 66 PERCENT INCREASE IN THIRD QUARTER EARNINGS
Topics:


Related Articles
CENTEL ANNOUNCES QUARTERLY DIVIDEND
THERAGENICS ANNOUNCES THIRD QUARTER RESULTS; QUARTERLY PROFITS INCREASE NEARLY THREE-FOLD; REVENUES ALSO SOAR
EXEL LIMITED DECLARES DIVIDEND, RAISES QUARTERLY RATE
SPECTRUM INFORMATION REPORTS RESULTS
FRANKLIN ELECTRIC DECLARES PAYMENT OF FIRST QUARTERLY CASH DIVIDEND ON COMMON STOCK SINCE RECAPITALIZATION IN 1989
TIME WARNER INC. INCREASES COMMON STOCK DIVIDEND BY 14 PERCENT
PARAMOUNT COMMUNICATIONS DECLARES REGULAR QUARTERLY DIVIDEND

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters