AT&T stock falls 9.8% on weak forecast; slowdown in long distance will cause net to drop up to 14% in 3rd quarter

Article Abstract:

AT&T's 3rd qtr 1996 earnings will be much lower than its previous quarters in and the company's outlook is rather gloomy. AT&T expects a similar decrease in its 4th qtr 1996 financial performance. A decline in the company's long-distance business and increased network and marketing expenses are blamed for the decline in profits. AT&T is introducing a flat-rate calling plan for consumers, but the news was not enough to keep its stock price from declining sharply on the news of the decreased earnings. The decline in its stock, which fell $5.625 to $51.50 per share, accounted for 17 points in the 20.71 drop in the Dow Jones Industrial Average. AT&T hoped the spinoffs of its computer and phone-equipment businesses would help it to focus on its communications-services business, but the company's marketing plan remains cloudy and its management appears uncertain.

Finance, Securities, Company sales and earnings, Company earnings/profit, Company securities

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'New' AT&T bets on long distance, but its competitors are fleet of foot

Article Abstract:

AT&T Corp's announced divestment of its computer and equipment-making divisions is a calculated risk designed to make the company more competitive in the long-distance and wireless communications industries. The company will concentrate on its core long-distance market as deregulation increases the likelihood that a flux of smaller, aggressive phone companies will soon enter the telecommunications market. The company's long-distance unit, which generates $7.5 billion annual profit on $42 billion in revenue, will account for the bulk of the new business' interests, along with small businesses, credit cards and wireless communications. AT&T has eliminated significant costs in recent years, improving its operating margins to 15%, but MCI has outpaced AT&T in long-distance traffic volume growth with a 15% gain compared to AT&T's 9% gain.

Mergers, acquisitions and divestments, Telephone company, Telephone companies, Company restructuring/company reorganization, Reorganization and restructuring, Divestiture, Divestment, Company Operations

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AT&T weighs investment in Time Warner cable unit: infusion of up to $4 billion would help cut debt, improve current system

Article Abstract:

AT&T and Time Warner are currently discussing a $2 to $4 billion investment by AT&T to be used by Time Warner to upgrade its cable system and reduce debt. The discussions are complicated by the recent breakup and ongoing restructuring of AT&T, as well as a continuing partnership dispute between Time Warner and regional phone company, U S West. Time Warner is also currently restructuring its business and awaiting federal approval of its purchase of Turner Broadcasting System. The company may break up in much the same way AT&T is and distribute its formidable debt among the various units. The companies are unlikely to form a final agreement for some time, but once the restructuring is complete AT&T is expected to earn approximately $7 billion in annual operating profit.

Telephone Cable, Other Communication and Energy Wire Manufacturing, Nonferrous wiredrawing & insulating, Company investment, Investments, Time Warner Inc., TWX

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