AT&T Posts $207 Million Profit Despite Revenue DropAT&T Posts $207 Million Profit Despite Revenue Drop

AT&T's share price was virtually unchanged Wednesday, one day after the company reported that third-quarter revenue fell 8.3%, to $11.9 billion, primarily because consumer-derived revenue dropped 26%, to $2.7 billion. People are relying more on E-mail and cell phones, damaging the landline telco's once-monopolistic consumer revenue.

Net income was $207 million, or 5 cents a share, compared with $11.3 billion, or $3.13 a share, a year earlier, when AT&T was reporting a one-time $13.5 billion gain from the spin-off of its wireless business.

Third-quarter results for AT&T Broadband were one of the encouraging areas: Revenue was up 6.4%. The high-speed data, telephony, and digital-video unit is expected to complete its acquisition of Comcast by year's end. But business services generated $6.7 billion in revenue, down 1.6% a year ago.

Rival Sprint recently attributed its better-than-expected earnings to more than 50 new contracts from businesses that abandoned distressed carriers such as WorldCom.

Although AT&T said the fall of some of its competitors will help, it didn't go as far as saying the shift has improved earnings yet. But departing chairman and CEO C. Michael Armstrong said during a teleconference yesterday that the accounting scandals hurt AT&T during his tenure. Said Armstrong, "This journey turned out to be on a playing field that was simply not level."