NEW YORK (AP) -- AT&T Corp., stung by harsh competition for long-
distance phone customers as well as credit-card losses, on Thursday
reported an 11 percent drop in third quarter profits.
Investors' reaction to the results was muted, since AT&T warned a
month ago to expect the weaker profits. AT&T stock was unchanged at
$39.87 1/2 per share in trading on the New York Stock Exchange.
But the results gave a close look at the bruises on the nation's
largest telephone company from its heated battle for customers with
MCI, Sprint and a host of smaller providers of long-distance
AT&T said in the three months ended Sept. 30 it earned $1.36
billion, or 84 cents a share, from continuing operations, reflecting
its spinoff of Lucent Technologies, its high-technology equipment
business, and other parts of its previously announced breakup.
That was down from profits of $1.53 billion, or 96 cents a share
in the third quarter of 1995. Results last year also were adjusted
to eliminate results from Lucent and other units for purposes of
Revenues grew 2 percent to $13.23 billion from a restated $12.92
The results were in line with a warning last month from the
company that its earnings would be about 10 percent below market
expectations of about 92 cents per share.
AT&T's results contrasted with those at archrival Sprint Corp.,
which on Tuesday reported a 16 percent profit increase chiefly due
a flat-rate calling plan. The plan, which drew customers from AT&T,
resulted in a 21-percent increase in call volume at Sprint during
quarter -- far higher than the 5 percent increase at AT&T.
AT&T last month began fighting back with its own pricing plan that
also charged customers a flat rate for long-distance, direct-dialed
phone calls anywhere in the United States.
In a conference call Thursday, chief financial officer Rick Miller
said that the company was "encouraged by initial results" even
the new marketing program was just three weeks old.
The battle comes as AT&T undergoes a dramatic spinoff that
refocuses its attention on its long-distance and other core phone
In addition to the Lucent separation, AT&T is preparing to spin
off its computer manufacturing arm, NCR Corp., selling other units
and seeking a buyer for its underwater phone-cable business. The
uncertainty has been heightened by AT&T's search for a new president
and likely successor to chairman Robert E. …