Proving just how fragile the telecommunications industry still is, US telecoms giant AT&T reported a net loss of US$7.1bn in the third quarter, compared with a net income of US$418m this time last year. Much of the losses were driven by restructuring and asset impairment charges.
Excluding the asset impairment and restructuring charges, AT&T’s net income for the quarter should have been US$593m, an improvement on the net income of US$418m.
“Our results for the third quarter demonstrate significant progress in transforming AT&T’s cost structure and delivering a more effective business model for the future,” said David Dorman, AT&T’s chairman and CEO.
“Our ongoing focus on customer experience is generating marked improvements in our overall service metrics while our process and systems investments are yielding important productivity benefits for both AT&T and our customers.”
AT&T reported third-quarter 2004 consolidated revenue of US$7.6bn, which included US$5.6bn from AT&T Business and US$2.0 billion from AT&T Consumer. Consolidated revenue was flat sequentially, and declined 11.7pc versus the third quarter of 2003, primarily due to continued declines in long-distance voice and data revenue.
AT&T’s third-quarter 2004 consolidated operating loss was US$11.3bn. Excluding the asset impairment charges of US$11.4bn and net restructuring and other charges of US$1.1bn, adjusted operating income was US$1.2bn. This reflected a depreciation benefit of $537m due to the asset impairment charges.
By John Kennedy
