What were the main drivers behind the revenue decline in the quarter?

The primary drivers for the revenue decline were a significant decrease in wireless subscriber revenue and a decrease in network access revenue. The company's wireless segment saw reduced revenues, and network access revenues were impacted by regulatory changes like the Coalition for Affordable Local and Long Distance Service (CALLS) proposal, which reduced carrier switched access rates.

How did the company manage expenses in light of declining revenues?

SBC Communications Inc. implemented significant cost management strategies. Total operating expenses decreased by 17.6% for the quarter and 13.9% for the six-month period. This was achieved through reductions in employee levels, operational efficiencies, lower personnel benefit costs, and decreased outsourcing.

What is the outlook for the wireline segment, particularly with DSL?

The wireline segment showed resilience, with local service revenues increasing. The company is actively expanding its DSL service, reaching approximately 1,037,000 customers by the end of the second quarter. While network access revenues declined, growth in other wireline services, including DSL and data transport, is a key focus.

What impact are regulatory changes having on SBC's operations?

Regulatory changes are having a notable impact. The Illinois legislation introduced new requirements and potential revenue impacts, while Michigan legislation concerning end-user common line charges and price caps is still under legal challenge. The company is also navigating conditions set by the FCC related to the Ameritech merger, some of which have led to additional expenses.

AT&T INC. 10-Q Quarterly Report Q2 FY2001

Summary

SBC Communications Inc. (now AT&T Inc.) reported its financial results for the quarter and six months ended June 30, 2001. The company saw a decrease in total operating revenues for both periods compared to the prior year, largely influenced by a decline in wireless subscriber revenue and network access revenue. However, operating income showed a modest increase for the quarter, despite a decrease for the six-month period, reflecting effective cost management. Net income saw a healthy increase of 11.9% for the quarter and 6.9% for the six-month period year-over-year, partially aided by an extraordinary loss related to debt redemption. The company's strategic focus appears to be on growth areas like wireline services, particularly DSL, and managing operational efficiencies. Investors should note the ongoing impact of competition, economic conditions, and regulatory changes, especially in Illinois, which could significantly affect future results.

Key Highlights

1Total operating revenues decreased by 13.0% for the quarter and 12.0% for the six-month period compared to the prior year, driven by lower wireless subscriber and network access revenues.
2Operating income increased slightly by 2.6% for the quarter to $3,077 million, but decreased by 5.6% for the six-month period to $5,736 million.
3Net income grew by 11.9% to $2,071 million for the quarter and by 6.9% to $3,925 million for the six-month period, demonstrating improved profitability on a net basis.
4Earnings per diluted share increased to $0.61 for the quarter and $1.15 for the six-month period, up from $0.54 and $1.07 respectively in the prior year.
5The company is actively managing its debt, with a decrease in debt maturing within one year and various debt issuances and redemptions during the period.
6Despite a decrease in network access lines, the company continues to see growth in its wireline segment, particularly with the rollout of DSL, which now serves over 1 million customers.
7Significant restructuring and cost-saving measures are evident, with total operating expenses decreasing by 17.6% for the quarter and 13.9% for the six-month period.

AT&T INC. Quarterly Report for Q2 Ended Jun 30, 2001

Summary

Key Highlights

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