AT&T; Profits Up 56%; Rate Cuts Planned

American Telephone and Telegraph Co. said today that its first-quarter profits soared 56% from a year earlier, and it unveiled price cuts for long-distance calls that it said would save consumers $1 billion a year.

AT&T; released the results here during its 100th annual meeting--only the second gathering of stockholders in the “new” AT&T; that emerged after the court-ordered divestiture of its 22 Bell system telephone companies in January, 1984.

The company said its first-quarter net income climbed to $354 million, or 31 cents a share, from $227 million, or 20 cents a share, a year earlier.

The earnings, while up sharply, slightly trailed the estimates of some Wall Street analysts who had been looking for AT&T; to earn between 32 cents and 35 cents a share in the latest period.

Analysts and AT&T; have said, however, that it has been difficult to gauge AT&T;’s future performance since it began the transition from a monopoly to a free-market competitor. In addition, certain regulatory limits affecting AT&T; are only gradually being lifted.

AT&T; said that on June 1 it will cut rates for long-distance, WATS and 800-number services by 5.6%, and rates to 87 foreign cities will be reduced up to 6.6%.

The cuts will coincide with the start of a $1-a-month charge that residential and single-line business customers will pay their local telephone companies to help cover the cost of those local connections.

In turn, the local companies are expected to reduce the charges AT&T; and rival long-distance companies pay for their connections to local service.

“We will be passing along to our customers savings we get from paying local access charges,” AT&T; Chairman Charles L. Brown said.

For example, the daytime, weekday rate for a call from New York to Los Angeles will fall to $2.33 for five minutes from the current $2.53. The weekend rate will drop to 93 cents from $1.01.