Red Ink From Computer, Business Products Operations : AT&T; Move Results in 4th-Quarter Loss of $1.17 Billion

American Telephone & Telegraph, continuing to pay dearly for its entry into the data processing industry, Thursday reported a fourth-quarter loss of $1.17 billion against a year-earlier profit of $364 million.

Analysts had expected the quarterly deficit after the company’s announcement last month that it was setting aside $3.2 billion to cover the cost of a restructuring that will eliminate 27,400 jobs, close plants and reduce the value of other assets and inventory.

For the full year, AT&T; posted earnings of $139 million, down 91% from 1985, on revenue that dipped 1% to $34.09 billion. The profit stemmed from the strength of AT&T;’s traditional telecommunications business, which showed a 9.9% increase in revenue, offsetting a tide of red ink from the company’s newer computer and business products operations.

“Our earnings from operations were essentially flat, our costs too high and our results mixed,” said AT&T; Chairman James Olson in a prepared statement. “In some parts of the business, we demonstrated our ability to compete very well. In other areas, our efforts were disappointing.”

Olson said his top priority is to improve earnings in ways that “fundamentally strengthen the business for the long pull.” Meanwhile, however, he said he expects that declining revenue from equipment rentals and continued softness in some equipment markets this year will offset some of the expected savings from the cutbacks.

Last fall, Olson said the company would shift its focus to what he called “data networking.” The strategy is intended to exploit AT&T;’s century in the telephone business as the distinction blurs between the telecommunications and information systems businesses.

In New York Stock Exchange trading, AT&T; was the second most-active issue with 3,418,100 shares changing hands. It closed at $25.75, off 50 cents.

Michael D. Kennedy, an analyst with the Gartner Group in Stamford, Conn., said the company’s results seemed to indicate “a fire sale” to reduce inventory. He said he found the profit on equipment sales “extremely weak,” despite a “surprisingly strong” sales volume.

Because of that and AT&T;’s recent reduction of its long-distance telephone rates, Kennedy said he expects 1987 to be “a real tough year.”

Even more pessimistic was Robert B. Morris III, an analyst with Prudential-Bache Securities in San Francisco. He noted that operating earnings were down, even though a pension accounting change inflated the 1986 results.

“It looks like (positive) results are another year away,” Morris said. “That seems to be becoming the annual theme.”

In contrast with AT&T;, the so-called Baby Bell companies established by the breakup of the Bell System three years ago have reported relatively vigorous results.

Philadelphia-based Bell Atlantic on Thursday reported a 1986 profit of $1.17 billion, up from $1.09 billion a year earlier, on revenue that rose 9.2% to $9.92 billion. The fourth quarter showed a 1% increase in earnings to $271.9 million on a 12% gain in revenue to $2.60 billion.

Earlier this week, San Francisco-based Pacific Telesis and New York-based NYNEX reported gains in yearlong earnings, while profit at Southwestern Bell of St. Louis was down only because 1985 had included $57 million in non-recurring income from Yellow Pages operations.