AT&T reported Q3 consolidated revenue of $7.6 billion and a net loss of $7.1 billion, or $8.95 per diluted share, including non-cash asset impairment charges, as well as net restructuring and other charges. Excluding the asset impairment charges of $11.4 billion and net restructuring and other charges of $1.1 billion, adjusted operating income was $1.2 billion. Some highlights:
- AT&T Business revenue was $5.6 billion, a decline of 10.4 percent from the prior-year third quarter. Pricing pressure and continued declines in retail volumes negatively affected the unit’s revenue performance.
- Long-distance voice revenue for AT&T Business decreased 16.3 percent from the prior-year third quarter, driven by continued pricing pressure in both the retail and wholesale businesses, as well as a continued decline in retail volumes.
- Local access lines for AT&T Business totaled nearly 4.7 million at the end of the current period, representing an increase of nearly 56,000 lines from the end of the second quarter of 2004.
- Data revenue declined 9.7 percent from the prior-year third quarter. Revenue was negatively affected by pricing pressure, weak demand and technology migration. On a sequential basis, data revenue increased 0.2 percent. Data revenue was positively impacted by the customer disconnect of prepaid network capacity. Without the impact of this item, data revenue would have declined slightly sequentially.
- IP&E-services revenue grew 6.8 percent over the prior-year third quarter. The year-over-year growth was primarily driven by strength in advanced services, including Enhanced Virtual Private Network and IP-enabled frame.
- AT&T Consumer revenue was $2.0 billion, a decline of 15.2 percent versus the prior-year third quarter, driven by lower standalone LD voice revenue as a result of the continued impact of competition, wireless and Internet substitution and customer migration to lower-priced products
- AT&T expects its previously announced 20% workforce reduction will result in annualized cost savings of approximately $1.2 billion.
- Free cash flow was $1.1 billion for the quarter.