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(July 23, 2001) -- AT&T Corp.'s cable TV unit, AT&T Broadband, was a financial bright spot in an otherwise difficult second quarter, AT&T said today.

In its first quarterly report that does not include results from its AT&T Wireless unit (spun off as an independent company July 9), AT&T said second-quarter profits from continuing operations were 4 cents a share (excluding other income, asset impairment charges and the affects of the AT&T Wireless exchange). That compared to 42 cents a share a year ago, and slightly exceeded analyst expectations of 3 cents a share.

On a reported basis, AT&T said it lost 10 cents a share from continuing operations in the second quarter compared to a year ago. That included the affect in this year's quarter of a $1.1 billion pre-tax write down of AT&T's investment in Net2Phone (19 cents per share after tax) and a $470 million pre-tax gain on the sales of AT&T's stake in Japan Telecom (8 cents a share).

For the third quarter, which ends Sept. 30, AT&T predicted earnings from continuing operations would be from 2 cents to 5 cents a share, less than current analyst expectations of 6 cents a share.

Revenue for the quarter was off 3% from the year ago quarter, to $13.33 billion, primarily reflecting lower sales of its long distance voice telephone service.

Pro forma revenue at the AT&T Broadband unit (including year 2000 results from MediaOne, now part of AT&T Broadband) was up 13.7% from the year ago period, the company said.AT&T, the No. 1 U.S. long-distance telephone company and No. 1 U.S. cable TV system operator, was ranked No. 5 in U.S. ad spending by Advertising Age last year. -- Richard Gordan

Copyright July 2001, Crain Communications Inc.

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