AT&T Beats Q4 Forecast, Posts '99 Revenue Gain

PARIS (01/25/2000) - Claiming eight consecutive quarters of year-on-year revenue growth, AT&T Corp. said its pro-forma revenue for 1999 was US$64.141 billion, up 6.2 percent from 1998. Citing strong wireless and business services growth, the company also capped off the year with a fourth quarter that beat analysts' expectations.

Pro-forma revenue for the fourth quarter, which ended Dec. 31, was US$16.3 billion, up 5.9 percent form the fourth quarter in 1998, the company said in a statement. The pro-forma results are adjusted to include the purchase of cable television company Tele-Communications Inc. (TCI) and the IBM Corp. Global Network.

The acquisitions during the year complicated comparisons with the group's earlier performance on a per-share basis. Operational earnings per share were down to 57 cents per diluted share in the fourth quarter, compared to 68 cents one year ago, largely as a result of the effects of the TCI and IBM network acquisitions. However, the earnings managed to beat the consensus forecast of 55 cents of 24 analysts surveyed by First Call/Thomson Financial. Operational earnings excluding acquisition of TCI (now AT&T Broadband) and the IBM Global Network (now AT&T Global Network Services) were up to 84 cents per diluted share in the fourth quarter.

AT&T officials stressed the positive revenue picture today.

"We have a commitment of 5-7 percent annual revenue growth, and we delivered 6.2 percent," said chairman Michael Armstrong in a conference call. "That's the second consecutive year of increasing absolute revenue growth."

AT&T Business Services contributed $6.3 billion of that in the final quarter, a year-on year increase of 6 per cent.

But revenue from consumer services division fell 4.5 per cent compared to the final quarter of 1998, to US$5.4 billion. The company blamed the decline in revenue on competition in the consumer long distance market, and a move by customers to optional calling plans and wireless services.

The largest year-on-year revenue growth in the last quarter, though, came from AT&T's wireless services division, up 41.6 percent to US$2.1 billion, the company said.

"In Q4 our marketing machine came back up to full strength after a deliberate pause in Q3" to allow operational divisions a chance to catch up with subscriber demand, John Zeglis, wireless group chairman and chief executive officer said in a conference call.

He reported year-on-year subscriber growth of 33.6 per cent and an increase in average revenue per user (ARPU).

Data services would be important to future revenue growth, according to Zeglis.

"In 2000, we see ARPU flat or increasing very slightly, and we see data as important to that." he said.

An IPO of the wireless subsidiary was still planned for April, Armstrong said.

AT&T Corp., based in Basking Ridge, New Jersey, is at http://www.att.com/.

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