AT&T; Says Its Profit Declined, but It Beats Analysts’ Estimates

AT&T; Corp. said its profit slipped in the third quarter because of long-distance price wars, declining consumer revenue and slow growth in sales to businesses, but the decline was less than analysts expected.

The telecommunications giant said its profit from continuing operations fell to $1.56 billion, or 48 cents a share, from $1.84 billion, or 68 cents, a year ago. Including the Tele-Communications Inc. cable television business and the IBM network and online services business acquired earlier this year, AT&T;’s profit was $1.75 billion, or 54 cents a share.

Growth in its wireless and data services business helped AT&T; exceed Wall Street expectations of 53 cents a share, according to First Call/Thomson Financial.

Pro forma revenue grew 5.6% to $16.31 billion.

The company’s costs increased 19%, driven by the purchase of TCI, a centerpiece of Chairman C. Michael Armstrong’s plan to use cable networks to deliver voice, data and Internet services.

The earnings report provided a forum for AT&T; executives to address speculation about possible missteps and wrinkles in the handling of various issues facing the company’s bid to create a national telephone network using the cable TV wires reaching into most U.S. homes.

The most prominent obstacles have been talks to sell its new cable-telephone service on cable systems AT&T; doesn’t own, as well as demands by Internet service providers such as America Online who want access to AT&T;’s cable systems to offer high-speed Web access.

During a conference call with analysts, Armstrong rejected suggestions in the Wall Street Journal on Monday that AT&T; has angered cable operators Time Warner and Cablevision Systems on both scores.

Shares of AT&T; rose $1.69 to close at $44.69 on the New York Stock Exchange.

At a Glance

Other earnings, excluding one-time gains or charges unless noted, include:

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TECHNOLOGY:

* Ask Jeeves Inc. said its net loss widened in the third quarter to $9.3 million, or 37 cents a share, from a loss of $918,195, or 9 cents, a year ago. Excluding amortization of deferred stock compensation, the company said it lost $8.7 million, or 35 cents a share. Analysts expected a loss of 34 cents. Revenue climbed to $6.5 million from $113,000.

* Computer Sciences Corp.’s fiscal second-quarter profit rose 23% to $89.6 million, or 55 cents a share, matching expectations, as it benefited from a host of new contracts. Revenue rose 15% to $2.13 billion. The company also said it expanded a $1.2-billion May contract with United Technologies Corp. to include all of the company’s information-technology systems in North America. The 10-year agreement is now valued at $2.1 billion.

* HomeStore.com Inc. said its pro forma loss for the third quarter came in at 23 cents a share, compared with a loss of 28 cents a year ago and slightly better than the 24-cent loss analysts expected. Revenue jumped to $18.6 million from $4.9 million in the year-ago period.

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OTHER INDUSTRIES:

* American Express said third-quarter profit rose 13% to $648 million, or $1.42 a share, meeting expectations, as customers spent more with its credit cards and boosted investments with its financial planners. Revenue increased 12% to $4.88 billion.

* Columbia/HCA Healthcare said third-quarter profit from continuing operations rose 18% to $155 million, or 27 cents a share, 2 cents better than estimates, as admissions rose at its hospitals. Revenue fell to $3.89 billion from $4.58 billion a year ago as the company divested more than 100 hospitals and 20 surgery centers.

* Hambrecht & Quist Group said its fiscal fourth-quarter profit climbed nearly twelvefold to $43.54 million, or $1.63 a share, from $3.68 million, or 14 cents, a year ago, as investment banking and trading surged. The investment bank, which has agreed to be acquired by Chase Manhattan Corp., said revenue more than tripled to $221.69 million.

* McKesson HBOC said fiscal second-quarter profit from operations rose 4% to $75.2 million, or 27 cents a share, missing estimates of 32 cents, as sales at its software unit dropped because of customer concerns about year 2000 computer problems. Revenue excluding shipments to customers’ warehouses rose 22% to $6.91 billion.

* Minnesota Mining & Manufacturing said third-quarter profit rose 18% to $462 million, or $1.14 a share, better than the $1.06 analysts expected.

* Pixar Animation Studios, the computer-animation filmmaker, said its fiscal third-quarter net income soared to $32.3 million, 63 cents a share, from $867,000, or 2 cents, a year ago. Revenue climbed to $79.2 million from $2.5 million, with a boost from home-video sales of “A Bug’s Life.”

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Bloomberg News, Associated Press and Reuters were used in compiling this report.