AT&T has finally clawed its way into the black for the first time this year, but the carrier still faces a worrying decline in revenue just before its growing broadband business is about to be spun off and merged with Comcast Corp. In the third quarter to September 30, net income was $207 million, down from income of $11 billion on revenue of $11.9 billion, down from $13 billion.
At the nine-month stage, the net loss was $13.6 billion, down from income of $10.5 billion on revenue of $36 billon, down from $39.8 billion.
While CEO Michael Armstrong claimed that following the broadband spinoff, AT&T will be well positioned with a top notch leadership team, a sound financial structure and a wealth of opportunity in the market place, there is little financial evidence that the lumbering giant can live up to this description.
At AT&T business, revenue for the quarter was 1.6% down at $6.7 billion, a slower rate of decline than the 4.5% recorded so far this year. Its one achievement is that long-distance voice revenue, which showed a 19% fall in the first quarter and 12% in the second, had been brought down to 8% in the last three months.
Data/IP/Managed services showed 7% growth and local voice revenue showed a 5% rise. The company forecasts a 4.5% to 5% decline for the year. AT&T’s consumer business has been ravaged by competition from Baby Bells and the increased convenience of cellular phones. Revenue dropped by 25.9% to $2.8bn, and the company expects this to be the pattern for the year.