Investors expressed some alarm after AT & T Corp.'s May 2 earnings report contained bigger-than-expected declines in its long-distance business and advised that year-end earnings per share could be about 9 cents below earlier estimates.
AT & T's stock price fell by $7.13 per share by press time last Tuesday afternoon, to $41.88.
In the first quarter, revenue rose 5.8 percent to $15.8 billion. But net income ticked up to just $1.73 billion, or 53 cents per share, compared with $1.72 billion (61 cents) in the same period a year ago.
AT & T said it would likely finish the year with earnings in the $1.80- to $1.85-per-share range, down from previous guidance of about $1.89.
AT & T Broadband reported increases in revenue and cash flow, but it still lagged behind some industry peers. Revenue rose 7.9 percent in the quarter to $1.5 billion and pro forma cash flow rose to $366 million, up 39.8 percent.
The MSO added 91,000 high-speed-data customers in the period, ending with 294,000 subscribers. AT & T Broadband said it should finish the year with about 700,000 high-speed data customers.
The company's digital-cable customer count rose by 188,000, to finish at 1.9 million. AT & T Broadband said it was on track to meet its goal of between 2.5 million and 3 million digital-cable subscribers by year-end.
At the end of the quarter, AT & T had signed up a total of 39,500 subscribers for broadband-telephony service, which fell below some analysts' expectations.
According to published reports, some industry observers were disappointed with the number of broadband-telephony customers, and they expressed some doubt that the company could reach its goal of having 400,000 to 500,000 subscribers by the end of the year.
AT & T chairman C. Michael Armstrong, in a conference call with analysts, was optimistic that the company would meet its 2000 goals.
"In broadband telephony, we added 31,000 customers in the quarter," Armstrong said. "Our install rate continues to accelerate-500 per day-and we are on track for the full-year targets."
The number of daily installs for broadband telephony was more than five times that of the fourth quarter, the company said.
Armstrong added that AT & T's pending merger with Media-One Group Inc. is moving forward and should close by midyear.
AT & T Broadband president Dan Somers said broadband-telephony installs are at about 650 per day and total customers rose to 55,000 at the end of April.
"Customer acceptance remains high," Somers said in the conference call. "We have 16 percent penetration-near 20 percent by the end of May. We absolutely expect to achieve 400,000 to 500,000 customers by the end of the year."