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AT&T THIRD-QUARTER NET HITS NEW RECORD; RISES 16.1 PERCENT, EXCLUDING YEAR-AGO CHARGES

 AT&T THIRD-QUARTER NET HITS NEW RECORD;
 RISES 16.1 PERCENT, EXCLUDING YEAR-AGO CHARGES
 NEW YORK, Oct. 22 /PRNewswire/ -- AT&T (NYSE: T) today reported record quarterly net income of $963 million, or 72 cents per share, compared with a loss of $1.799 billion, or $1.40 a share, a year ago when the company took $4.2 billion of restructuring and other charges.
 Excluding the charges and a $31-million pre-tax gain from the sale of its remaining holdings in Sun Microsystems Inc., AT&T's third-quarter operational results rose 16.1 percent over the $829 million recorded a year ago; on a per-share basis, the gain was 12.5 percent compared with the 64 cents recorded last year.
 "The double-digit growth we experienced in operational results is especially gratifying because it was achieved against the drag of a slowly growing economy," said AT&T Chairman Robert E. Allen. "Our equipment sales were up, and we continued to see strong performance in our telecommunications and financial services."
 Third-quarter revenue of $16.180 billion compared with revenue of $15.628 billion a year ago. Operating income of $1.589 billion for the quarter compared with a loss of $2.777 billion in 1991. Excluding the charges, operating income rose 13.5 percent.
 Net income in the first nine months of 1992 was $2.807 billion, or $2.11 a share on revenues of $47.4 billion. At the nine-month point last year, the charges left AT&T with a loss of $113 million, or a loss of 9 cents a share, on revenues of $46.626 billion.
 The communications and computer company's previous record for net income was $961 million in the 1992 second quarter.
 Quarterly Results In Brief
 -- Telecommunications services revenues grew $315 million or 3.2 percent, as long-distance calling volumes rose about 6 percent.
 -- AT&T Universal Card Services, which recorded its first profitable month in June, followed with its first profitable quarter in just over two years of existence and helped produce a 35-percent jump in financial-services revenues.
 -- NCR continued to contribute to AT&T's operating income, despite the computer industry's continued slump.
 -- In products, microelectronic components led the list of AT&T units that saw improvements in sales. Other units with increases included those that provide cable, switching, operations and transmission systems for communications-services providers, and business phone systems.
 -- Tight control of costs and expenses contributed to margin improvements.
 Results In Detail
 Telecommunications Services: Healthy gains in toll-free 800 services for business led the growth in long-distance volumes and revenues. Other domestic and international business and consumer services also saw increases.
 Products and Systems: Revenues rose 1.7 percent overall from the 1991 third quarter, led by higher sales of micro-electronics components and business phone systems.
 Sales for the quarter of network telecommunications products and systems were about flat, as strong overseas sales offset a decline in the United States. Revenues from sales of consumer products were down quarter to quarter.
 NCR's total revenues were $1.7 billion for the quarter; operating income was $49 million. NCR continues to report strong orders in the United States, but orders outside the U.S. weakened as a result of the computer industry's slump worldwide.
 (NOTE: NCR results now include portions of AT&T's former computer business, Teradata and sales to other AT&T units. Current figures are not comparable to the pre-merger 1991 NCR financial results.)
 Financial Services: Revenues in this category were $485 million for the quarter, compared with $358 million a year ago, as Universal Card and AT&T Capital Corporation, AT&T's equipment-leasing and -- financing unit, continued to do well despite the economy.
 Rentals and Other Services: Revenues improved 2.7 percent 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 $164 million, largely as a result of increased volumes in long-distance and credit card usage. Excluding the third-quarter 1991 charges, total operating expenses were essentially flat.
 At the end of the third quarter, AT&T's total workforce was 314,700.
 Alex J. Mandl, AT&T's chief financial officer, will comment on the company's third-quarter results in a conference call for financial analysts at 11 a.m. EDT today. Reporters may access the call by dialing either 1-800-722-1024 or 1-800-225-1168. The call will be rebroadcast over the same numbers at 2 p.m. and 4 p.m. EDT today, and again at 9 a.m. EDT on Friday, October 23.
 AT&T CONSOLIDATED STATEMENTS OF INCOME
 Dollars in millions except per share amounts
 (Preliminary and unaudited)
 Periods ended Three Months Nine Months
 Sept. 30 1992(A) 1991(B) 1992(A) 1991(B)
 SALES AND REVENUES
 Telecommunications
 services(C) $10,132 $ 9,817 $29,856 $29,013
 Sales of products and systems 3,873 3,808 11,167 11,536
 Rentals and other services 1,690 1,645 5,060 5,113
 Financial services and leasing 485 358 1,317 964
 Total revenues 16,180 15,628 47,400 46,626
 COSTS
 Telecommunications services:
 Access and other
 interconnection
 costs(C) 4,550 4,575 13,692 13,887
 Other costs 1,829 1,701 5,283 5,161
 Total telecommunications
 services 6,379 6,276 18,975 19,048
 Products and systems 2,308 2,309 6,585 6,537
 Rentals and other services 820 837 2,341 2,483
 Financial services and leasing 341 262 940 760
 Total costs(D) 9,848 9,684 28,841 28,828
 Gross margin 6,332 5,944 18,559 17,798
 Operating expenses
 Selling, general and
 administrative
 expenses 4,019 4,408 11,849 11,902
 Research and development
 expenses 724 810 2,122 2,338
 Provision for business
 restructuring(D) 0 3,503 39 3,566
 Total operating expenses(D) 4,743 8,721 14,010 17,806
 Operating income (loss) 1,589 (2,777) 4,549 (8)
 Other income-net(E)(F) 86 60 344 385
 Interest expense 137 104 500 535
 Income (loss) before
 income taxes 1,538 (2,821) 4,393 (158)
 Provision for income taxes 575 (1,022) 1,586 (45)
 Net income (loss) $ 963 $(1,799) $ 2,807 $ (113)
 Earnings (loss) per share $ .72 $ (1.40) $ 2.11 $ (.09)
 Average shares (millions) 1,336 1,294 1,329 1,287
 Dividends declared per share $ .33 $ .33 $ .99 $ .99
 (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 the third quarter of 1991, AT&T recorded approximately $4,200 ($2,647, or $2.06 per share, after taxes) of business restructuring and other charges. The charges were recorded primarily as provision for business restructuring of $3,503; selling, general and administrative expenses of $501; and cost of products and systems of $123.
 (E) -- The three months ended Sept. 30, 1991, includes a pre-tax gain of $31 on the sale of AT&T's equity interest in Sun Microsystems Inc. (Sun). The nine months ended Sept. 30, 1991, includes a pre-tax gain of $171 ($.08 per share after taxes) on the sale of AT&T's equity interest in Sun.
 (F) -- In March 1991, AT&T recognized a pre-tax gain of $43 ($.03 per share after taxes) from the sale of equity interests in a subsidiary, UNIX System Laboratories, Inc.
 -0- 10/22/92
 /CONTACT: Jim Byrnes, 908-221-4011, or (home) 908-689-6040 or Dick Gray, AT&T - 908-221-5057 (office); 908-232-3706 (home)
 (T) CO: AT&T ST: New York IN: CPR SU: ERN


TS -- NY017 -- 3299 10/22/92 08:28 EDT
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