AT&T Reports 4 Cents Earnings Per Share from Continuing Operations in Line with Company Forecast; On a Reported Basis, Loss Per Share was 5 Cents.Business & Technology Editors NEW YORK--(BUSINESS WIRE)--July 23, 2001 AT&T Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). Grows Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Revenue 13.7 Percent from Year Ago and Significantly Improves Margin in Second Quarter AT&T today announced second-quarter results for AT&T Common Stock Group. For the second quarter, AT&T earned $0.04 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , excluding other income, asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges and the effects of the AT&T Wireless exchange, which was at the high end of the company's forecast. This compares with $0.47 per diluted share from the year-ago quarter. On a reported basis, AT&T's Common Stock Group continuing operations lost $0.10 per diluted share compared to earnings per diluted share of $0.48 for the second quarter of 2000. The second-quarter 2001 continuing operations loss includes the effect of a $1.1 billion pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. to market of AT&T's investment in Net2Phone A VoIP telephone service from Net2Phone, Inc., Newark, NJ (www.net2phone.com) that uses software in the user's PC to call another PC, regular phone or fax. When introduced in 1996, it used ads to supplement its low rates and did not support calls to the PSTN. ($0.19 per share after tax) and a $470 million pre-tax gain on the sale of AT&T's stake in Japan Telecom ($0.08 per share after tax). The company said its investment in Net2Phone was impacted by the market-wide decline in technology companies as well as consumer demand developing more slowly than initially expected. On a reported basis, including both continuing and discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , AT&T loss per diluted share was $0.05. AT&T reported second-quarter revenue from its continuing operations of approximately $13.33 billion, a 3 percent decline from the year-ago quarter. AT&T noted that revenue from AT&T Wireless, which is now a separate company, is not included in the company's total revenue results. The revenue decrease is primarily due to a continued decline in long distance voice revenue, which was partially offset by strong results from AT&T's Broadband unit and from Business data/Internet Protocol (IP) services. Pro forma revenue from continuing operations, which adjusts for the acquisition of MediaOne MediaOne was a cable company created by U S WEST in 1995. The cable service started as a division of U S WEST Media Group. In time the service also included pay-per-view, and a self-branded high-speed cable modem internet service named Hiway1 ("Highway One"). , the elimination of per line charges, the consolidation of Excite@Home, and closed cable partnerships, decreased $833 million, or 5.9 percent, over second quarter 2000. "While our total revenue reflects the impact of the industry-wide decline in long distance voice, we are growing revenue in Business data and IP services and our Broadband business by nearly 14 percent," said AT&T Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. C. Michael Armstrong C Michael Armstong (born 18 October, 1938, in Detroit, Michigan) is the former AT&T chairman and CEO, who tried to reestablish AT&T as an end-to-end carrier. Unfortunately, due to the dot.com bust and various other issues, he was forced to break the group up in 2001. . "That means later this year, AT&T Business will for the first time reach a crossover Crossover The point on a stock chart when a security and an indicator intersect. Crossovers are used by technical analysts to aid in forecasting the future movements in the price of a stock. In most technical analysis models, a crossover is a signal to either buy or sell. point where revenue from growth services will exceed long distance voice revenue, and we are well on our way to full-year revenue growth in the mid-teens in AT&T Broadband. "Since last quarter, AT&T Broadband and AT&T Business have improved their EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become margins, excluding other income, as we focus on containing costs and maximizing cash flow," Armstrong added. "For example, in Broadband we took a $100 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. in the second quarter to further streamline our cost structure. When we exclude the restructuring charge, our Broadband EBITDA margin, excluding other income, was 23.4 percent. "We also continued to aggressively reduce our net debt by shedding nearly $4 billion in the second quarter. Since the end of June June: see month. , we have reduced net debt even further to $39.5 billion, and continue to focus on deleveraging as a top priority," Armstrong said. "When we split off AT&T Wireless earlier this month, it had a market cap of more than $40 billion. It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have the first business we launched in our planned restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and a good example of the value we expect to unlock for AT&T shareowners." AT&T BUSINESS UNIT HIGHLIGHTS: AT&T Broadband revenue on a reported basis was $2.57 billion, a 49.5 percent increase over the year-ago quarter. AT&T Broadband second quarter pro forma revenue, which includes the results of MediaOne in both periods and also adjusts for other cable transactions, increased 13.7 percent year-over-year due to increased revenue from video operations, high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data and broadband telephony See VoIP. . AT&T Broadband rapidly grew new services as it added, on a pro forma basis, about 553,000 advanced new service revenue-generating units (RGUs), which include broadband telephony, high-speed data and digital video customers. This represented an increase of approximately 46 percent from the number added in the year-ago quarter. At the end of the quarter, AT&T Broadband had 848,000 broadband telephony customers, 1.3 million high-speed data customers and 3.1 million digital video customers for a total of 5.3 million RGUs. Pro forma EBITDA margins, excluding other income, decreased 1.9 percentage points versus the year-ago quarter due to expenses associated with the roll out of broadband telephony, higher programming costs and increased restructuring charges, offset by revenue growth and cost control measures. On a sequential basis, AT&T Broadband improved its EBITDA margin, excluding other income and restructuring charges, to 23.4 percent. AT&T Business revenue was $7.09 billion, a decline of 1.8 percent over the year-ago quarter on a reported basis and a 1.7 percent decline on a pro forma basis. The lower revenue resulted from a low-teens rate decline in long distance voice revenue, substantially offset by revenue increases from growth services. AT&T's data/IP business revenue grew approximately 14 percent year-over-year. The rate reflects a deceleration deceleration /de·cel·er·a·tion/ (de-sel?er-a´shun) decrease in rate or speed. early deceleration in the unit's wholesale revenue growth rate, due in part to industry-wide overcapacity o·ver·ca·pac·i·ty n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. and reduced demand. Leading AT&T's data/IP growth was a strong performance from the company's nearly $4 billion packet services business, which includes Frame Relay A high-speed packet switching protocol used in wide area networks (WANs). Providing a granular service of up to DS3 speed (45 Mbps), it has become popular for LAN to LAN connections across remote distances, and services are offered by most major carriers. , ATM and IP. Packet services grew more than 30 percent, reflecting growth in all services over the year-ago quarter. Total IP services, which include IP connectivity services, Virtual Private Network services and hosting services, continued to maintain strength in the quarter by growing more than 25 percent. Despite industry-wide pricing pressure, hosting continued to grow more than 50 percent. Local voice revenue grew more than 30 percent compared with the year-ago quarter, which reflects the impact of unfavorable reciprocal Bilateral; two-sided; mutual; interchanged. Reciprocal obligations are duties owed by one individual to another and vice versa. A reciprocal contract is one in which the parties enter into mutual agreements. compensation adjustments. Adjusting for this impact, local voice revenue grew more than 20 percent on a year-over-year basis. Local access lines also increased more than 30 percent since last year's second quarter with nearly 300,000 lines added year to date. AT&T Solutions revenue grew at a low single-digit rate primarily as a result of exiting certain unprofitable contracts and the economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and high-technology industries. AT&T said it expects its decision to exit several unprofitable contracts and weakness in wholesale capacity sales to negatively impact AT&T Business' full-year 2001 revenue growth rate by up to two percentage points. AT&T also noted that revenue performance of its Business unit for the remainder of the year could be subject to further downward pressure from weakness in the U.S. economy. AT&T Business continued to strengthen its sales force by hiring 400 new sales people this year in addition to the more than 2,500 sales people hired in 2000. The company said the unit's recent reorganization, which is aimed at better positioning the business to serve customers and improve cost structure, is well underway. The unit's second quarter EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). margin, excluding other income, was 17.1 percent, a 4.4 percentage point decline from the year-ago quarter, but an increase from 16.5 percent in the first quarter of this year. Reported EBIT and EBITDA declined 10.3 percent and 7.5 percent, respectively, over the year-ago quarter. The decline reflects the impact of long distance voice pricing pressure as well as a shift from higher-margin long distance services to lower-margin growth business services. AT&T Consumer had $3.79 billion in reported revenue for the second quarter, a decline of 23.7 percent, over the year-ago quarter. The unit's pro forma revenue decreased 19.8 percent. The revenue decrease was primarily driven by technology substitution Substitution Arsinoë put her own son in place of Orestes; her son was killed and Orestes was saved. [Gk. Myth.: Zimmerman, 32] Barabbas robber freed in Christ’s stead. [N.T.: Matthew 27:15–18; Swed. Lit. of wireless and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the services, competition, the slowdown in the economy and continued customer migration to lower-priced products and optional calling plans. The unit's second-quarter EBIT margin, excluding other income, was 32.1 percent, a decrease of less than 1 percentage point from the first quarter and 3.3 percentage points from the year-ago quarter. The decline reflects the impact of lower revenue, partially offset by the unit's efforts to manage costs. In the quarter, the Consumer unit continued to roll out lower-cost electronic billing Electronic billing is the electronic delivery and presentation of financial statements, bills, invoices, and related information sent by a company to its customers. Electronic billing is also referred to as the following:
(communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary ) to optimize optimize - optimisation assets acquired from NorthPoint Northpoint or North point may refer to:
Corporate and Other, includes the consolidated results of Excite@Home, corporate staff functions and eliminations. Reported revenue increased $44 million in the second quarter to a negative $118 million compared to a negative $162 million in the year-ago quarter, primarily due to the consolidation of Excite@Home. Corporate and Other EBIT, excluding other income and asset impairment charges, declined $239 million to a negative $253 million, compared with the year-ago quarter. The decline was primarily driven by costs associated with AT&T's corporate restructuring plan, a lower pension credit in 2001 and the impact of the consolidation of Excite@Home. AT&T Wireless Services second-quarter results will be reported separately on July July: see month. 24 by the newly independent company. AT&T's second-quarter earnings reflect the results of the now independent company AT&T Wireless as "discontinued operations" in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . As a result, AT&T Wireless revenue and expenses are not included in the revenue and expense lines of AT&T's income statement, and AT&T Wireless operating results are excluded from AT&T's earnings from continuing operations. AT&T Wireless earnings are represented in AT&T Common Stock Group results as earnings from discontinued operations. Earnings per share from discontinued operations were $0.05, as a result of the gain Wireless realized from the sale of its stake in Japan Telecom, partially offset by AT&T Wireless'operating loss.
2nd Quarter at a Glance 2Q01 Vs 2Q00 2nd Quarter Highlights
AT&T Broadband Revenue $2.6b 13.7% Continuing
Operations
Total Revenue $13.3b
AT&T Business Revenue $7.1b (1.7%)(a) Continuing
Operations
Reported EPS $(0.10)
AT&T Consumer Revenue $3.8b (19.8%)(a) Continuing
Operations EPS,
excluding other
income, asset
impairment charges
and effects of AT&T
Wireless exchange $0.04
Continuing Operations
EBITDA, excluding Total Assets $196.1b
other income and
asset impairment $3.9b (19.7)%
charges Net Debt(b) $43.6b
Continuing Operations Continuing
EBIT, excluding Operations Cash
other income and EPS, excluding other
asset impairment $1.5b (49.6%) income, asset
charges impairment
charges and
effects of AT&T
Wireless exchange $0.16
Capital
expenditures $2.2b
(a) Pro Forma (b) Includes AT&T
Wireless net debt
of $6.5 billion
included in "net
assets of
discontinued
operations" and
excludes monetized
debt and cash.
THIRD QUARTER OUTLOOK: AT&T said it expects AT&T Group pro forma revenue for continuing operations in the third quarter to decline in a range similar to the second quarter of 2001, and could be subject to further downward pressure due to possible further weakness in the U.S. economy. EBITDA, excluding other income, is expected to be similar to second quarter. AT&T said it expects third quarter EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. from continuing operations, excluding other income, to be in the range of $0.02 to $0.05 and cash EPS for continuing operations, excluding other income, in the range of $0.14 to $0.17. DEFINITIONS: AT&T Group does not include the results of Liberty Media Group (LMG LMG Light Machine Gun LMG Laurence M. Gould (Antarctic Research Support Vessel, USAP) LMG Local Marketing Group LMG Loaf's Merry Guild LMG Laboratory Molecular Genetics LMG Liquid Methane Gas ), which is tracked as a separate class of stock. Earnings of AT&T Group are attributed to either AT&T Common Stock Group or AT&T Wireless Group. Cash EPS, excluding other income, refers to earnings per share excluding other income, equity earnings (loss), the cumulative effect of accounting changes and amortization of franchise costs, goodwill associated with acquisitions and other purchased intangibles. EBIT refers to earnings before interest, taxes, the cumulative effect of accounting changes and dividend requirements on preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , the premium on the Wireless tracking stock exchange and discontinued operations. EBIT, excluding other income, refers to EBIT excluding other income and pre-tax equity earnings (loss). EBITDA refers to EBIT excluding depreciation and amortization, and minority interest other than Excite@Home's minority interest. EBITDA, excluding other income, refers to EBITDA excluding other income and pre-tax equity earnings (loss). EPS, excluding other income, refers to earnings per share excluding other income, equity earnings (loss) and the cumulative effect of accounting changes and the premium on the Wireless tracking stock exchange. Pro forma revenue is adjusted for the acquisition of MediaOne, the elimination of per line charges by the Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. , the consolidation of At Home Corp. (Excite@Home), and closed cable transactions. The foregoing are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " which are based on management's beliefs as well as on a number of assumptions concerning future events made by and information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside AT&T's control, that could cause actual results to differ materially from such statements. These factors include the rate of decline of traditional long distance voice services, technology change and substitution, the actions of competitors in all segments in setting prices, conditions of excess capacity, and rates of implementation of regulatory changes that favor competitors and promote remonopolization. For a more detailed description of the factors that could cause actual results to differ from forecast, please see AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. EDITOR'S NOTE Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : AT&T will announce second quarter 2001 earnings on Monday Monday: see week. , July 23 at 4:15 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . AT&T executives will host an analyst conference call at 5:30 p.m. to discuss the company's results. To access the call, please dial 888-428-4470 (domestic) or 612-288-0340 (international). A replay will be available beginning at 10:00 p.m. EDT on Monday, July 23 until midnight on Wednesday Wednesday: see week. , July 25. To access the replay, please visit www.att.com/ir or dial 800-475-6701, access code: 595760 (domestic) or 320-365-3844, access code: 595760 (international). On Tuesday Tuesday: see week. , July 24 at 1:00 p.m. EDT, AT&T will present a comprehensive financial and operational update on its Broadband business via conference call and web cast. Executive team members from AT&T and AT&T Broadband will present the current status and future view of the business and answer questions. The slide presentation referenced during the briefing will be available via AT&T's web site shortly before 1:00 p.m. Presentation slides and audio will also be available for downloading downloading - download . To access the call, please dial 877-209-9920 (domestic) or 612-332-0725 (international) or web cast at www.att.com/ir. A replay will be available beginning at 5:00 p.m. EDT on Tuesday until midnight on Thursday, July 26. To access the replay, please visit www.att.com/ir or dial 800-475-6701, access code: 595485 (domestic) or 320-365-3844, access code: 595485 (international).
AT&T Group
Combined Statements of Income (Unaudited)
For the Three Months For the Three Months
Ended June 30, 2001 Ended June 30, 2000
Dollars in Millions
(except per
share amounts)
Revenue $ 13,326 $ 13,744
Operating Expenses
Costs of services
and products 3,410 3,009
Access and other
connection 3,105 3,527
Selling, general and
administrative 2,810 2,357
Depreciation and
other amortization 1,732 1,366
Amortization of goodwill,
franchise costs and
other purchased
intangibles 618 345
Net restructuring and
other charges 287 -
-------- --------
Total operating expenses 11,962 10,604
-------- --------
Operating income 1,364 3,140
Other (expense) income (1,446) 346
Interest expense 761 568
-------- --------
(Loss) income from
continuing operations
before income taxes,
minority
interest and net
loss from
equity investments (843) 2,918
(Benefit) provision for
income taxes (872) 1,094
Minority interest
income (expense) 198 (46)
Net loss from equity
investments 278 188
-------- --------
(Loss) income from
continuing operations (51) 1,590
Income from discontinued
operations - net of tax 218 177
Dividend requirements of
preferred stock 236 -
Premium on wireless
stock exchange 80 -
-------- --------
(Loss) earnings
available to
common shareowners $ (149) $ 1,767
-------- --------
AT&T Common Stock Group:
(Loss) earnings $ (191) $ 1,745
Weighted-average
shares (millions) 3,694 3,253
Weighted-average shares
and potential common
shares (millions)(a) 3,694 3,314
(Loss) earnings from
continuing operations
per basic share $ (0.10) $ 0.49
Earnings from discontinued
operations per
basic share 0.05 0.05
-------- --------
(Loss) earnings per
basic share $ (0.05) $ 0.54
(Loss) earnings from
continuing operations
per diluted share $ (0.10) $ 0.48
Earnings from discontinued
operations per
diluted share 0.05 0.05
-------- --------
(Loss) earnings per
diluted share $ (0.05) $ 0.53
Dividends declared
per share $ 0.0375 $ 0.22
AT&T Wireless Group:
Earnings $ 42 $ 22
Weighted-average
shares (millions) 513 360
Weighted-average shares
and potential common
shares (millions) 513 360
Earnings per basic and
diluted share $ 0.08 $ 0.06
(a) Weighted-average shares assumes dilution from the potential
conversion of debt and equity securities and the potential
exercise of outstanding stock options and other performance
awards.
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