Mixed signals from AT&T’s third quarter

AT&T’s revenue fell 8% to $12 billion during its third fiscal quarter, but improvements over the year ago quarter provided a positive spin for the company. The provider’s sales drop was attributed to a 25% loss in consumer sales due to long distance revenue poaching by other competitive technologies such as wireless.

This quarter’s net income was $207 million, or $0.05 a share, compared with $11.3 billion, or $3.13 a share on revenue of $13 billion, in the year ago quarter. But with this quarter the company earned $0.06 per share, whereas in the year ago quarter it had a $0.02 loss. Analysts had expected earnings of $0.05 per share.

Two of AT&T’s businesses did see declines to add up to the 8% drop in revenue. AT&T Business and AT&T Consumer were down, while AT&T Broadband was up.

The results also marked the farewell to chairman and CEO C. Michael Armstrong, who is retiring after 5 years at his post. He will officially retire once the merger with Comcast is completed and will be replaced by CEO-elect David Dorman.

“This journey turned out to be on a playing field that was decidedly not level,” Armstrong said pointing to the accounting fraud scandals and investigations. “But we are not distracted by [those],” he said.

Armstrong added that he believes the company will see strong growth from multi-national companies as borders come down and markets open up. “This company has the ability to satisfy that reach like no other,” he said. “We’re not just the last telecom standing. We’re the telecom that is best built to serve our customers’ future.”

Additionally, Armstrong said AT&T will now account for management stock options as an expense, following the lead of others such as General Electric and Coca-Cola.