Cost Cutting Cited for Jump in AT&T; Income

American Telephone & Telegraph Co.'s cost cutting began to pay off as the company managed a 25.7% profit gain in spite of a 6.8% slide in revenue, the phone giant reported Wednesday.

AT&T;'s profit for the first three months of 1987 was $445 million, up from $354 million a year earlier. The 1986 profit originally had been reported as $529 million, but was restated to reflect a change in accounting methods.

Revenue slipped to $8.12 billion from $8.71 billion.

Last year AT&T; announced plans to cut 32,000 jobs, consolidate facilities and write down the book value of plants, equipment and inventory.

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