Earnings Climb 17 Percent at AT&T
By MICHELLE ROBERTS Associated Press
The company raises projections for cost savings in the buyout of BellSouth Corp.
SAN ANTONIO — AT&T Inc.’s fourth-quarter earnings rose 17 percent, the company reported Thursday, reaffirming its growth target for 2007 and raising projections for the cost savings expected from the just-completed buyout of BellSouth Corp.
The nation’s largest provider of local phone, cellular and DSL Internet services said it posted net income of $1.94 billion, or 50 cents a share. In the same quarter a year earlier, earnings totaled $1.66 billion, or 46 cents per share.
Fourth-quarter revenue reached $15.9 billion, up 23 percent.
The AT&T results included only negligible amounts of revenue and profit from BellSouth, as the $86 billion acquisition closed only two days before the end of the quarter.
The deal gave San Antonio-based AT&T full ownership of Cingular Wireless LLC and extended the company’s local phone territory across the Southeast. Cingular was still 40 percent owned by BellSouth for most of the fourth quarter, so AT&T’s revenue figure only included two days worth of sales by the cell phone venture.
In its final quarter as an independent company, BellSouth earned $1.2 billion, 29 percent higher than a year earlier. Revenue increased less than 5 percent to $9.1 billion.
AT&T’s latest results included merger expenses from late 2005′s acquisition of the AT&T long-distance business by SBC Communications, which adopted the AT&T name. Excluding those merger expenses, AT&T’s fourth-quarter profit would have been 61 cents per share, surpassing the 59 cents predicted by analysts.
AT&T’s share price jumped to a 52-week high early in the day before retreating as the overall market slid. The stock finished 16 cents higher at $36.79 on the New York Stock Exchange after reaching as high as $37.70.
The company noted that full-year savings from the purchase of the AT&T long-distance business totaled $1.1 billion, surpassing the $600 million to $800 million initially projected.
Management also boosted the forecast for savings expected from the BellSouth takeover.
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