AT&T; Exec Gets Leadership Award as Firm’s Shares Slide
AT&T; Corp. Chief Executive C. Michael Armstrong got some good news on a day when the company warned of lower profit and its shares plummeted: He’s being honored for his leadership.
Commerce Secretary Bill Daley will present Armstrong with the nonprofit Private Sector Council’s award today for his work to create good relations between business and government. Rep. Bill Archer (R-Texas) also will receive a leadership award at a dinner at the Park Hyatt Hotel in Washington.
Some AT&T; shareholders aren’t cheering their CEO after the company lowered its earnings estimate for 2000, saying long-distance revenue growth will be slower than expected, and its first-quarter profit fell. The stock plunged 14%, its biggest decline since the stock market crash of October 1987.
“We’re in a very volatile market and any news one way or the other is disproportionately reacted to,” Armstrong said in a Bloomberg Television interview. “The Street [will] look at a 1% change in outlook in terms of revenue [and] bring it back into equilibrium.”
Investors aren’t so sure.
“Some of [Armstrong’s] aura is starting to wear off,” said Jana Harris, an analyst at Ohio Public Employees Retirement System. “The problems they spoke about are not new.” AT&T; is the biggest holding in Ohio Public’s $5-billion Large Cap Alpha Fund.
Since Armstrong took over in November 1997, AT&T;’s shares have risen an average of 17% a year, below the 22% annual increase for the Standard & Poor’s 500 Index. Rival MCI WorldCom rose 33% annually over that time.
