Restating results for 2001 and 2002 and having fired the four employees allegedly responsible, AT&T
The restatements rectify accounting treatments accorded AT&T bills for access charges and reduced 2001 and 2002 EPS by $0.04 and $0.06, respectively. Chairman and CEO David Dorman said there was no comparison between AT&T's error and MCI's "where people have been indicted for fraud," and given that AT&T itself reported the issue to the SEC, it's hard not to agree. The company won't sue the employees or make further restatements related to the issue.
AT&T said revenues from business customers fell 6.3% from $6.7 billion to $6.28, while consumer sales dropped 16% from $2.79 billion to $2.35 billion. EPS doubled from $0.26 to $0.53, primarily due to a tax credit and improvements at discontinued operations.
We've detailed AT&T's struggles as it divested its wireless and broadband operations to pay off debt. The stock collapsed and reverse split -- almost always a bad omen. While we like to be contrarian and invest against the herd when we see opportunity, it's hard to see the upside right now for this shadow of its former self.
Even the 4.75% dividend yield isn't exactly a sure thing. (That not all dividends are created equal is a primary tenet of Mathew Emmert's Motley Fool Income Investor.)
Attacked on all sides by new technology -- phone service from cable operators, broadband Internet phone service from the likes of Vonage (what's that? Find out!) -- Ma Bell is struggling to cut costs and stop the madness. It's a hard road to be sure.
Is there any reason for optimism? Talk it over with out Fool community on the AT&T discussion board !