Despite an overall weak telecom market, AT&T said it continues to take market share and outpace its competitors for high-end enterprise communications. The company's continued focus on cost management yielded significant free cash flow of $1.4 billion for Q2. AT&T plans to further reduce its overall debt, increase its dividend to shareholders, and continue to out-invest its competitors in building the network of the future, an all-IP, seamless global network. Highlights of the financial report include:
- Q2 revenue of $8.8 billion, which included $6.4 billion from AT&T Business Services and $2.4 billion from AT&T Consumer Services. The total is down 8.2% compared to Q2 2002, which the company attributed to continued declines in long distance voice revenue, partially offset by the continued success of AT&T Consumer Services' bundled local and LD offering, as well as growth in several key markets of AT&T Business Services. Reported income was $536 million and earnings per diluted share were $0.68.
CAPEX in Q2 was $790 million. Spending is being directed to improving the overall customer experience
net debt at the end of Q2 was $10.8 billion, down $1.2 billion from Q1 2003
by the end of the year, AT&T expects its employee headcount will be down 9% compared to the end of 2002
AT&T Business Services:
- Revenue was $6.4 billion, a decline of 5% from the prior year second quarter.
Long distance voice revenue declined 11% on a quarter-over-quarter basis, while traffic volumes grew 12%
Local voice revenue grew approximately 39% from the prior year second quarter. Local access lines totaled over 4.2 million at the end of the current period, representing an increase of nearly 135,000 lines from Q1 2003.
AT&T Consumer Services:
- Revenue was $2.4 billion, a decline of 18% percent versus the prior year second quarter
Operating income totaled $489 million, yielding an operating margin of 20.6%
At the end of Q2 2003, there were 3.1 million local access customers in 12 markets across the U.S. The company plans to serve 22 local markets by the end of 2003.
