Exhibit 99.2
FOR IMMEDIATE RELEASE WEDNESDAY, OCTOBER 25, 2000
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AT&T PROVIDES FINANCIAL GUIDANCE FOR 2000 AND 2001
NEW YORK -- In a meeting today with the financial community on the
company's third-quarter earnings results and plans to create four new
independent companies, AT&T outlined its anticipated key financial projections
for 2000 and 2001. The new outlook is based on an updated view of its long
distance voice, wireless and broadband businesses.
"We have long anticipated declines in voice long distance revenue," said
AT&T Chief Financial Officer Charles H. Noski, "but the pace of strong price
competition and customers shifting to wireless and Internet technologies has
rapidly accelerated across the industry. We see the positive effect of this
shift in our third quarter wireless revenue growth of nearly 37 percent and our
third quarter data and IP revenue growth of more than 20 percent. But the
competitive price declines from our mature voice long distance businesses will
lower our revenue expectations and affect our financial results for the fourth
quarter of 2000 and full year 2001."
The company said it anticipates operational earnings per diluted share for
the fourth quarter in the range of 29 - 33 cents. As a result, AT&T's
operational earnings for 2000 are now expected to range between $1.66 - $1.70.
Cash earnings for the quarter, on the same basis, are projected to be in the
range of 49 - 52 cents per share. The company said operational earnings before
interest, taxes, depreciation and amortization (EBITDA) would remain around $23
billion for the full year, and top line revenue is expected to grow around 4 to
5 percent for the fourth quarter compared to the fourth quarter of 1999.
The company said its Broadband unit has grown revenue at an increasing
rate throughout the year. Revenue for the first quarter grew at 8.2 percent,
second quarter rose 10.5 percent, and third quarter reached 10.8 percent.
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The company said it expects this growth trend to continue in the fourth
quarter and grow at a mid-teens rate in 2001, as the company continues to scale
new services. As a result, AT&T expects Broadband EBITDA margin, excluding other
income, to increase about 3 percentage points, compared to full year 2000.
Through the first nine months of this year, AT&T said its wireless
services business has achieved 36.2 percent revenue growth. For the full year,
the company said it is confident that AT&T Wireless will achieve the high end of
the 30 to 35 percent revenue growth range, subscriber growth greater than 40
percent and EBITDA growth in the mid-50's percent. On a consolidated basis for
transactions already closed, AT&T Wireless expects 2001 revenue growth at more
than 20 percent, subscriber growth around 20 percent and EBITDA growth in the
low to mid 50's percent. If certain announced or anticipated transactions close,
AT&T Wireless expects to report revenue growth in 2001 at a rate similar to the
one achieved in 2000.
AT&T said its data and IP services business, which now accounts for about
one-third of AT&T Business Services revenue, grew more than 20 percent in the
third quarter and it expects to maintain this growth rate in the fourth quarter
and in 2001. AT&T Solutions, a similarly fast-growing unit within Business
Services, has also maintained a growth rate of more than 20 percent through
September 30. This rate is expected to continue in the fourth quarter and
throughout 2001.
However, despite volume growth, the company said that pricing pressures
have caused Business Services' long distance voice revenue to decline throughout
2000. In the third quarter, the voice revenue decline was in the mid-single
digits. As a result, Business Services total revenue grew at 2.5 percent in the
third quarter. The company said it expects a similar trend in the fourth quarter
and similar growth rates in 2001 compared to full year 2000. As a result, AT&T
expects Business Services operational EBIT margin to decrease 3 to 4 percentage
points in 2001 compared with full year 2000.
As previously announced, the company's Consumer Services revenue has also
declined throughout 2000. For the third quarter, this decline rose to nearly 11
percent. The company expects a similar rate of decline in the fourth quarter.
For the full year 2001, the revenue decline is expected to reach the mid- to
high-teens, and will reduce the unit's operational EBIT margin 5 to 7 percentage
points compared to 2000.
AT&T said it would provide future comments on 2001 financial performance
at an analyst meeting to be held in January, 2001, to review prospects for its
Wireless, Broadband, Business and Consumer units.
Materials provided at the financial community briefing are available to
all investors via the Internet at www.att.com/ir.
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The foregoing are "forward-looking statements" which are based on
management's beliefs as well as on a number of assumptions concerning future
events made by and information currently available to management. Readers are
cautioned not to put undue reliance on such forward-looking statements, which
are not a guarantee of performance and are subject to a number of uncertainties
and other factors, many of which are outside AT&T's control, that could cause
actual results to differ materially from such statements. For a more detailed
description of the factors that could cause such a difference, please see AT&T's
filings with the Securities and Exchange Commission. AT&T disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. This
document also contains certain information such as operational EPS, operational
cash EPS and reported and operational EBIT and EBITDA that are not presented in
accordance with generally accepted accounting principles. This information is
presented solely to provide additional information to further understand the
results of AT&T.
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