AT&T; Net Income Off 11%; 4 Bells See Gains

AT&T; Corp.’s third-quarter earnings fell 11%, as slow long-distance growth and a loss in its financial services business offset better-than-expected profit at its NCR Corp. computer unit, the company said Thursday.

Profit from continuing operations fell to $1.36 billion, or 84 cents a share, from $1.53 billion, or 96 cents, a year ago. Earnings matched the average estimate of analysts after AT&T;’s warning last month that profit would miss earlier forecasts.

A year after AT&T; unveiled a sweeping restructuring designed to boost its long-distance business, the company again lagged rivals in phone-traffic growth.

It also has yet to name a new president two months after Chairman Robert Allen’s heir apparent, Alex Mandl, left the company.

“AT&T; has become more nimble, but it’s still an enormous battleship that takes a long time to turn,” said Brian Adamik, an analyst at Yankee Group in Boston.

AT&T; posted strong growth in its Internet and wireless businesses, and NCR’s profit was better than expected, analysts said. In its core long-distance business, though, a new flat-rate calling plan designed to lure back defectors may not be enough. The plan offers U.S. long-distance calls for 15 cents a minute.

“The results reflect weak volume growth and continued pressure in the long-distance business,” said Frank Governali, an analyst at CS First Boston.

AT&T; is spending billions of dollars to enter new markets such as wireless, local phone and Internet businesses. In the third quarter, capital spending rose 65% to $1.7 billion. Chief Financial Officer Rick Miller said capital spending this year will be substantially more than the $4.3 billion for 1995.

AT&T; stock was unchanged at $39.875 on the New York Stock Exchange.

*

Pacific Telesis Group said its third-quarter profit rose 4% as the company added phone lines and carried more traffic on its network.

The San Francisco-based regional Bell telecommunications company reported net income of $286 million, or 67 cents a share, compared with profit from operations of $275 million, or 64 cents, a year ago.

In the year-ago period, a charge of $3.36 billion, or $7.86 a share, for an accounting change resulted in a loss of $3.08 billion, or $7.22.

Results were 1 cent below analysts’ expectations of 68 cents a share.

“Solid performance in our core reflects strong marketing efforts,” said Philip J. Quigley, Pacific Telesis chairman and chief executive, in a statement.

At a Glance:

SBC Communications said third-quarter profit rose 11%, boosted by growth in cellular customers and new phone lines. Net income was $593.3 million, or 97 cents a share, up from profit from operations of $534.3 million, or 88 cents a share, in the same period a year ago.

Bell Atlantic said it earned $483.3 million, or $1.10 per share, for the three months ended Sept. 30., up 9.4% from $441.9 million, or $1.10 a share, a year ago.

BellSouth said its third-quarter profit rose 12.9 % to a record $631 million, or 63 cents a share, up from $559 million, or 56 cents a share, in the same period last year.