AT&T, boosted by third-quarter growth in wireless and data services, offset a decline in its core business to post a 67% increase in earnings and beat Wall Street estimates.
The communications giant reported third-quarter revenue of $13.653 billion, up 4% from $13.09 billion in the third quarter of 1997. Net income for the quarter was $1.959 billion, up from $1.164 billion. AT&T had earnings per share of $1.00, beating First Call estimates of 95 cents per share.
The solid quarter comes at a good time for AT&T, which has had a succession of rough quarters in the past year as the company's core consumer business has slipped under increased competition. Today's results "demonstrate that we're successfully executing our strategy to reduce costs, achieve profitable growth, and win in a competitive environment," AT&T chairman C. Michael Armstrong said in a statement.
The revenue growth was spurred by business services, which grew $262 million or 5% over last year, with much of that growth coming from high-speed data services, and wireless services, which rose $230 million or 19% over last year. Consumer services dropped $171 million (3%) from the third quarter of 1997.
The results reflect AT&T's July acquisition of local carrier Teleport Communications Group Inc.