Here is a look at Wednesday's top business stories:
AT&T posts loss
NEW YORK, April 24 (UPI) -- Long-distance telephone and cable-television giant AT&T Corp. said its first-quarter losses widened to $975 million, or 28 cents a share, from a loss of $192 million, or 10 cents a share during the same period last year.
The per-share amounts are after preferred dividends.
Revenues on a pro forma basis fell 8.4 percent to $12.02 billion from $13.6 billion a year ago, primarily due to continued declines in long distance voice services.
The latest results included expenses of $856 million from a change in the company's acquisition-related accounting.
Analysts on Wall Street had expected AT&T to post earnings of 4 cents a share and revenue of $12.09 billion, according to Thomson Financial/First Call.
AT&T, which in December agreed to sell its cable television business to Comcast Corp., said profits, excluding one-time items, were 6 cents a share, compared with a loss of 2 cents a share, a year ago.
The company said its declining revenue was offset by growth at AT&T Broadband, primarily in high-speed data, telephony and digital video, as well as growth at AT&T Business in data/Internet Protocol/managed services and local services.
Michael Armstrong, chairman and chief executive officer, said, "During the quarter we maintained our focus on managing costs, increasing revenue in our growth businesses, and improving customer satisfaction.
"AT&T Business experienced solid growth in packet and local services, despite challenging economic conditions. AT&T Consumer, which continues to report industry-leading long distance EBIT margins, began offering local service in two more states. And AT&T Broadband reached an important milestone as cable telephony reached the EBITDA break-even point. The unit also hired and trained approximately 1,000 new customer service representatives and added more than half a million new telephony, high-speed data and digital video customers," Armstrong said.
AT&T Business reported an EBIT margin, excluding other expense/income, of 13.5 percent, compared with 16.5 percent in the year-ago quarter.
This decline reflects the impact of pricing pressures and the transition from higher margin long distance services to lower margin growth business services, the company said.
The unit's EBIT, or earnings before interest, taxes, extraordinary items, on the same basis, was $883 million. The unit's first-quarter revenue was $6.53 billion, a decline of 8.0 percent from the year-ago quarter.
The unit's revenue reflects a continuing decline in long distance voice services due to continued pricing pressures, partly offset by growth in data/IP/managed services and local voice services.
AT&T said its Data/IP/managed services revenue grew about 6 percent year-over-year. Excluding low-speed private line services, data/IP/managed services growth was approximately 8 percent.
AT&T said its long distance voice revenue declined approximately 19 percent from the year-ago quarter, as current pricing levels worked their way through the contract base. Overall calling volumes were roughly flat.
Local voice revenue grew nearly 17 percent year-over-year. More than 100,000 access lines were added in the quarter, bringing the total number of access lines in service to more than 3 million.
AT&T Consumer reported an EBIT margin, excluding other expense/income, of 26.3 percent, compared with 32.8 percent in the year-ago quarter, and EBIT of $821 million on the same basis. The unit had revenue of $3.13 billion, a decline of 22.0 percent from the year-ago quarter, due to the effects of competition, wireless and Internet substitution, a shift to lower-priced products such as prepaid cards, and customer migration to lower-priced calling plans.
AT&T said Broadband's EBITDA, excluding other expense/income, was $465 million for the quarter. EBITDA margin, on the same basis, was 19.0 percent.
Excluding the impact of Comcast merger-related costs, AT&T Broadband's EBITDA margin was 20.4 percent.
AT&T Broadband grew pro forma revenue, which is adjusted for significant closed cable dispositions and acquisitions, 13.9 percent over the year-ago quarter to $2.44 billion. The increase was primarily from advanced services including high-speed data, telephony and digital video, as well as increased basic video revenue due to a rate increase that took effect on Jan. 1.
Revenue declined 1.1 percent from the year-ago quarter.
Looking ahead, AT&T said it expects second quarter earnings of 1 to 4 cents a share and a revenue decline similar to the first quarter's 8.4 percent. Analysts are currently anticipating earnings per share of 4 cents a share on revenue of $11.91 billion.
Stocks ease in Tokyo
TOKYO, April 24 (UPI) -- Stock prices on the Tokyo Stock Exchange ended slightly lower in cautious trading as investors opted for the sidelines ahead of earnings results from Japan's largest consumer and industrial electronics manufacturers.
Stocks rose in Hong Kong; and in Taipei, Taiwan; but eased in Seoul, South Korea; and in Sydney, Australia.
Japan's blue-chip Nikkei Stock Average of 225 selective issues, which added 15.19 points Tuesday, lost 63.95 points, or 0.5 percent, to 11,672.88. The broader Topix index lost 5.78 points, or 0.5 percent, to 1,098.72.
Volume declined to an estimated 818.33 million shares from 855.17 million shares changing hands Tuesday.
Declines outpaced advances 880 to 455, while another 153 issues settled unchanged.
Analysts said stocks eased amid caution ahead of the release of earnings reports from Japan's largest companies such as Sony, NEC and Fujitsu, which will begin reporting their full year earnings on Thursday.
While the market expects upbeat news from manufacturers and exporters, investors were wary before the releases.
Technology stocks were mostly lower on profit-taking, but declines were limited due to mounting expectations companies reporting earnings Thursday and Friday will make bullish forecasts for this year.
Meanwhile, telecommunication stocks remained under pressure, with the plunge in Worldcom stocks in the United States still affecting sentiment, analysts said.
In trading, Sony eased 0.3 percent and Matsushita Electric Industrial lost 1.5 percent. But Fujitsu gained 0.8 percent and NEC rose 0.4 percent. Toshiba lost 0.7 percent.
Among some of the other active issues, Hitachi slipped 1.0 percent, Mitsubishi Electric eased 0.7 percent, Tokyo Electron lost 3.1 percent, Japan Telecom lost 1.7 percent, NTT DoCoMo fell 1.2 percent and KDDI lost 2.2 percent.
Oriental Land, the operator of Tokyo Disneyland, climbed 4.8 percent after the company revised upwards its earnings forecast, citing brisk growth in the number of visitors to Disneyland and the Tokyo Disney Sea Park opened in September.
Suruga Bank plunged 14 percent as the regional bank revised down its earnings forecast due to increased bad loan write-offs.
Elsewhere in Asia, prices ended higher on the Hong Kong Stock Exchange in robust trading, extending Tuesday's gains as short-term liquidity from overbought Asian markets continued to enter the local bourse. The blue-chip Hang Seng Index rose 51.39 points, or 0.45 percent, to 11,396.57. The index has gained 754 points over the last ten trading sessions.
Analysts said strength in the telecommunications and property sectors offset losses in blue chip utilities.
In trading, Sun Hung Kai rose 1.9 percent and Henderson Land gained 2.2 percent and New World Development gained 2.3 percent. HSBC Holdings fell 0.3 percent, China Mobile added 1.8 percent, while its mainland rival China Unicom rose 1.3 percent.
CNOOC, China's largest offshore oil producer, fell 4.7 percent, HK & China Gas fell 2.6 percent and Hongkong Electric lost 1.0 percent.
Meanwhile, prices ended higher on the Taiwan Stock Exchange, lifted by a favorable reading on the local economy. The Weighted Index rose 64.77 points, or 1.01 percent, to 6,455.39.
Analysts said a surprisingly strong exports and industrial output report for March boosted market sentiment.
March export orders rose 1.7 percent from the year before and industrial output rose 0.4 percent, defying forecasts of sharp falls.
Among some of the active issues, Taiwan Semiconductor Manufacturing added 0.7 percent, AU Optronics, the world's third largest computer display panel maker, gained 1.9 percent and Macronix International rose 1.0 percent.
Prices ended lower on the South Korean Stock Exchange, pressured by weakness in the banking sector. The Kospi Composite Index lost 10.01 points, or 1.08 percent, to 915.69.
Bank shares fell on a Korea Economic Daily report that Micron Technology has called on Hynix Semiconductor's creditors to write off about $3.86 billion in debt before it takes over the chipmaker.
In trading, shares of leading creditor Korea Exchange Bank sank 7.7 percent, Hynix jumped 7.4 percent and Korea Electric Power Corp. rose 1.2 percent.
Elsewhere in the Pacific region, prices ended lower on the Australian Stock Exchange, pressured by weakness in the resources and mining sector. The All Ordinaries Index lost 27.40 points, or 0.82 percent, to 3,324.10.
In trading, BHP Billiton lost 2.3 percent, Telstra fell 2.1 percent and Westpac Banking Corp. eased 0.4 percent.
Markets in Australia will be closed on Thursday for the Anzac Day holiday. Trading will resume on Friday.
Report: Microsoft to reorganize unit
NEW YORK, April 24 (UPI) -- Microsoft Corp. plans to reorganize its struggling interactive-television unit and lay off about 60 people, according to the Wall Street Journal.
The software giant also is likely to lay off more than 140 people employed at its Ultimate-TV unit which was disbanded in January, the Journal reported, citing a company spokeswoman.
Microsoft, in a shift, will now focus on delivering software for simpler "broadcast" services, such as video on demand, and for new "media center" devices, which can offer home networking, DVD playback, and music and photo storage, the Journal reported.
Fleming buys Core-Mark and Head Distributing
DALLAS, April 24 (UPI) -- Fleming said it has reached an agreement to acquire privately held convenience store distributors Core-Mark International and Head Distributing for $430 million in cash and assumed debt.
The supplier of consumer package goods noted that Core-Mark had sales of $3.4 billion in 2001 and Head had sales of $350 million.
"Our shareholders will be clear beneficiaries of Fleming's expanded sales and the increased earnings we anticipate from these acquisitions," said Mark Hansen, Fleming's chairman and chief executive.
Head's deal was closed on April 23 and Core-Mark's is expected to be finalized within 90 days.
Fleming estimates the purchases will produce synergies of $20 million in 2003 and $30 million in 2004.
In conjunction with the deals, Fleming said it plans to file a shelf registration statement for the sale of up to $600 million of debt and/or common stock.
The company anticipates issuing a combination of debt securities and common stock in public offerings in order to fund these acquisitions.
The company also said it plans to refinance its existing senior credit facility later this spring.
