AT&T; Stock Drops as Profit Declines 22%

AT&T; reported sharply lower earnings Thursday that disappointed analysts and drove the phone giant’s stock down.

American Telephone & Telegraph Co.’s earnings fell 22% in the final three months of the year. For all of 1991, profit sank 83% because of the $4.2-billion cost of a restructuring and job cuts.

For the three months ended Dec. 31, the nation’s largest phone company said it earned $635 million, or 48 cents a share, down from $809 million, or 64 cents a share, in the same period of 1990.

Revenue totaled $11.95 billion, up slightly from $11.88 billion a year earlier.

Fourth-quarter profit was cut 14 cents a share because of a reduction in the value of AT&T;’s stake in the parent company of Olivetti, the Italian computer maker.

Excluding this one-time earnings reduction, AT&T;’s fourth-quarter profit was 62 cents a share. Industry analysts had been expecting this figure to be slightly higher, said Greg Sawers, who follows AT&T; for the investment firm Sanford C. Bernstein & Co.

AT&T; stock fell 75 cents a share to $39.62 1/2 on the New York Stock Exchange. The shares are the most widely owned of any company.

For the year, AT&T; earned $522 million, or 40 cents a share, down from $3.10 billion, or $2.42 a share, in 1990. Revenue totaled $44.65 billion, up from $43.62 billion.

The $4.2-billion charge against earnings, announced in October, will pay for a cost-cutting program that includes the elimination of about 14,000 jobs through Jan. 1, 1994.

The revenue and earnings figures for both last year and the 1990 comparison periods include the results of NCR.

AT&T; said its long-distance and financial services revenue continued to grow during the fourth quarter despite the recession, but sales of the company’s products dropped 7% in the quarter and 1% in the year.