Long-Distance Market Boosts AT&T; to 20.6% Gain in Profits
American Telephone & Telegraph Co., coming off the first annual loss in its history on the strength of a boom in the long-distance telephone market, today said its profits jumped 20.6% to $594 million in the first quarter.
New York-based AT&T; earned 55 cents a share in the first quarter, compared to $492 million, or 46 cents a share, a year ago. Revenues rose to $8.66 billion from $8.39 billion, buoyed by robust long-distance and product sales.
Analysts had expected earnings growth from 15% to 20%. By contrast, rival MCI Communications Corp. reported Tuesday that its profits jumped 132% to $135 million.
Wall Street greeted the news with enthusiasm. Shares of AT&T; rose 25 cents to $33.375 as the New York Stock Exchange’s second most-active issue this morning.
AT&T;'s long-distance operations are being fueled by aggressive advertising and sales promotions, an expanded sales force and increased regulatory flexibility, the company said.
Such flexibility may help the telephone giant’s balance sheets later in the year.