October 22, 2002, 11:06 AM — AT&T Corp. reported third quarter 2002 earnings of US$207 million or $0.05 per diluted share from continuing operations Tuesday, compared with a loss of $2.2 billion in the third quarter of 2001.
AT&T's reported earnings are in line with analysts' expectations of $0.05 per share for the third quarter.
Revenue for the third quarter was $12 billion, down 8.3 percent from third quarter 2001.
The loss in revenue was offset, however, by an increase in revenues from the AT&T Broadband unit and demand for data, IP (Internet Protocol), and managed services in the AT&T Business unit.
Revenue for the AT&T Broadband unit grew 6.4 percent to $2.5 billion from the third quarter 2001 on demand for telephony, high-speed data, and digital video services. The AT&T Broadband unit provides cable television and broadband Internet services to over 13.6 million U.S. customers.
In December, 2001 AT&T agreed to merge the Broadband unit with U.S. cable operator Comcast Corp. in a $72 billion deal. Regulatory approval for the merger is expected by the end of the fourth quarter 2002.
Revenue for the AT&T Business unit declined by 1.6 percent to $6.7 billion from the same period last year, due primarily to the decline in revenue from long distance voice services. AT&T Business sells voice and data services, IP services, hosting and consulting services to U.S. and multinational businesses.
The AT&T Consumer unit reported a decline in revenue of 25.9 percent to $2.8 billion from the third quarter 2001. The company blamed the decline on a shift by consumers to wireless- and Internet-based phone service and stiff competition for customers. The AT&T Consumer unit sells long distance and international phone services and dial-up Internet service through the AT&T WorldNet Service.
AT&T is predicting a decline in revenues of between 4.5 percent and 5 percent for the year in its AT&T Business unit and more than 20 percent in the AT&T Consumer unit. Revenue growth of 10 percent or more is expected for the year in the AT&T Broadband unit. AT&T did not provide year-end guidance for the entire company, in addition to its estimates for each business unit.
The company is looking forward to a business focused on providing communications services following the spin-off of the Broadband unit this year, according to AT&T.