Just as AT&T is about to spin off its computer unit NCR after a disastrous period of ownership, the division is ironically making a profit at last. NCR turned in its second consecutive quarter of profits, making $29 million, contrasting with a loss of $196 million in the same period last year.
Parent AT&T plans to offer NCR to its shareholders by the end of the year. Overall, the telco giant announced an 11 per cent drop in profits in the third quarter, blaming increased competition in its home market and additional investment as the primary reasons.
Profits dropped to $1.36 billion on turnover of $13.23 billion, compared to $1.53 billion on $12.92 billion in the same period last year. The company had already issued a profits warning last month.
Analysts on Wall Street said the financials from AT&T reveal the effects of its spin-off of Lucent and its disastrous foray with NCR, which will be offered to its shareholders by year end. The NCR debacle caused a $1.6 billion charge due to restructuring.
Robert Allen, AT&T's chairman, said the company was disappointed with its profitability but said long term plans it was putting in place were likely to improve its fortunes. AT&T is looking for a chairman to succeed Allen, who retires shortly.
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