2nd Qrtr Rslts CommonStock Gp

S Number:3677H
AT & T Corp (IRS)
23 July 2001



For more information, contact:

Eileen M. Connolly                              June Rochford
908-221-6731                                    908-221-8165


      AT&T Reports 4 Cents Earnings Per Share from Continuing Operations in Line
                             with Company Forecast
                 On a Reported Basis, Loss Per Share was 5 Cents 
     AT&T Broadband Grows Pro Forma Revenue 13.7 Percent from Year Ago and      
                   Significantly Improves Margin in Second Quarter 


NEW YORK - AT&T today announced second-quarter results for AT&T Common Stock
Group. 

For the second quarter, AT&T earned $0.04 per diluted share from continuing
operations, excluding other income, asset impairment charges and the effects of
the AT&T Wireless exchange, which was at the high end of the company's forecast.
This compares with $0.47 per diluted share from the year-ago quarter. On a
reported basis, AT&T's Common Stock Group continuing operations lost $0.10 per
diluted share compared to earnings per diluted share of $0.48 for the second
quarter of 2000. The second-quarter 2001 continuing operations loss includes the
effect of a $1.1 billion pre-tax write-down to market of AT&T's investment in
Net2Phone ($0.19 per share after tax) and a $470 million pre-tax gain on the
sale of AT&T's stake in Japan Telecom ($0.08 per share after tax). The company
said its investment in Net2Phone was impacted by the market-wide decline in
technology companies as well as consumer demand developing more slowly than
initially expected. On a reported basis, including both continuing and
discontinued operations, AT&T loss per diluted share was $0.05.

AT&T reported second-quarter revenue from its continuing operations of
approximately $13.33 billion, a 3 percent decline from the year-ago quarter.
AT&T noted that revenue from AT&T Wireless, which is now a separate company, is
not included in the company's total revenue results. The revenue decrease is
primarily due to a continued decline in long distance voice revenue, which was
partially offset by strong results from AT&T's Broadband unit and from Business
data/Internet Protocol (IP) services. Pro forma revenue from continuing
operations, which adjusts for the acquisition of MediaOne, the elimination of
per line charges, the consolidation of Excite@Home, and closed cable
partnerships, decreased $833 million, or 5.9 percent, over second quarter 2000. 

"While our total revenue reflects the impact of the industry-wide decline in
long distance voice, we are growing revenue in Business data and IP services and
our Broadband business by nearly 14 percent," said AT&T Chairman and CEO C.
Michael Armstrong. "That means later this year, AT&T Business will for the first
time reach a crossover point where revenue from growth services will exceed long
distance voice revenue, and we are well on our way to full-year revenue growth
in the mid-teens in AT&T Broadband. 

"Since last quarter, AT&T Broadband and AT&T Business have improved their EBITDA
margins, excluding other income, as we focus on containing costs and maximizing
cash flow," Armstrong added. "For example, in Broadband we took a $100 million
restructuring charge in the second quarter to further streamline our cost
structure. When we exclude the restructuring charge, our Broadband EBITDA
margin, excluding other income, was 23.4 percent.  "We also continued to
aggressively reduce our net debt by shedding nearly $4 billion in the second
quarter. Since the end of June, we have reduced net debt even further to $39.5
billion, and continue to focus on deleveraging as a top priority," Armstrong
said. 

"When we split off AT&T Wireless earlier this month, it had a market cap of more
than $40 billion. It's the first business we launched in our planned
restructuring and a good example of the value we expect to unlock for AT&T
shareowners." 

AT&T BUSINESS UNIT HIGHLIGHTS:

AT&T Broadband revenue on a reported basis was $2.57 billion, a 49.5 percent
increase over the year-ago quarter. AT&T Broadband second quarter pro forma
revenue, which includes the results of MediaOne in both periods and also adjusts
for other cable transactions, increased 13.7 percent year-over-year due to
increased revenue from video operations, high-speed data and broadband
telephony. 

AT&T Broadband rapidly grew new services as it added, on a pro forma basis,
about 553,000 advanced new service revenue-generating units (RGUs), which
include broadband telephony, high-speed data and digital video customers. This
represented an increase of approximately 46 percent from the number added in the
year-ago quarter.

At the end of the quarter, AT&T Broadband had 848,000 broadband telephony
customers, 1.3 million high-speed data customers and 3.1 million digital video
customers for a total of 5.3 million RGUs. 

Pro forma EBITDA margins, excluding other income, decreased 1.9 percentage
points versus the year-ago quarter due to expenses associated with the roll out
of broadband telephony, higher programming costs and increased restructuring
charges, offset by revenue growth and cost control measures. On a sequential
basis, AT&T Broadband improved its EBITDA margin, excluding other income and
restructuring charges, to 23.4 percent. 

AT&T Business revenue was $7.09 billion, a decline of 1.8 percent over the
year-ago quarter on a reported basis and a 1.7 percent decline on a pro forma
basis. The lower revenue resulted from a low-teens rate decline in long distance
voice revenue, substantially offset by revenue increases from growth services. 

AT&T's data/IP business revenue grew approximately 14 percent year-over-year.
The rate reflects a deceleration in the unit's wholesale revenue growth rate,
due in part to industry-wide overcapacity and reduced demand. Leading AT&T's
data/IP growth was a strong performance from the company's nearly $4 billion
packet services business, which includes Frame Relay, ATM and IP. Packet
services grew more than 30 percent, reflecting growth in all services over the
year-ago quarter. Total IP services, which include IP connectivity services,
Virtual Private Network services and hosting services, continued to maintain
strength in the quarter by growing more than 25 percent. Despite industry-wide
pricing pressure, hosting continued to grow more than 50 percent.

Local voice revenue grew more than 30 percent compared with the year-ago
quarter, which reflects the impact of unfavorable reciprocal compensation
adjustments. Adjusting for this impact, local voice revenue grew more than 20
percent on a year-over-year basis. Local access lines also increased more than
30 percent since last year's second quarter with nearly 300,000 lines added year
to date. 

AT&T Solutions revenue grew at a low single-digit rate primarily as a result of
exiting certain unprofitable contracts and the economic slowdown in the
financial services and high-technology industries. 

AT&T said it expects its decision to exit several unprofitable contracts and
weakness in wholesale capacity sales to negatively impact AT&T Business'
full-year 2001 revenue growth rate by up to two percentage points. AT&T also
noted that revenue performance of its Business unit for the remainder of the
year could be subject to further downward pressure from weakness in the U.S.
economy. 

AT&T Business continued to strengthen its sales force by hiring 400 new sales
people this year in addition to the more than 2,500 sales people hired in 2000.
The company said the unit's recent reorganization, which is aimed at better
positioning the business to serve customers and improve cost structure, is well
underway.

The unit's second quarter EBIT margin, excluding other income, was 17.1 percent,
a 4.4 percentage point decline from the year-ago quarter, but an increase from
16.5 percent in the first quarter of this year. Reported EBIT and EBITDA
declined 10.3 percent and 7.5 percent, respectively, over the year-ago quarter.
The decline reflects the impact of long distance voice pricing pressure as well
as a shift from higher-margin long distance services to lower-margin growth
business services. 

AT&T Consumer had $3.79 billion in reported revenue for the second quarter, a
decline of 23.7 percent, over the year-ago quarter. The unit's pro forma revenue
decreased 19.8 percent. The revenue decrease was primarily driven by technology
substitution of wireless and Internet services, competition, the slowdown in the
economy and continued customer migration to lower-priced products and optional
calling plans. 

The unit's second-quarter EBIT margin, excluding other income, was 32.1 percent,
a decrease of less than 1 percentage point from the first quarter and 3.3
percentage points from the year-ago quarter. The decline reflects the impact of
lower revenue, partially offset by the unit's efforts to manage costs. 

In the quarter, the Consumer unit continued to roll out lower-cost electronic
billing. As a result, the unit had three times more customers on e-bills at the
end of the quarter than it did a year ago. The company said the unit is
maximizing efforts to control costs and continues to have industry-leading
margins. The company also said AT&T Consumer is moving ahead with its plans for
digital subscriber lines (DSL) to optimize assets acquired from NorthPoint this
quarter. 

Corporate and Other, includes the consolidated results of Excite@Home, corporate
staff functions and eliminations. Reported revenue increased $44 million in the
second quarter to a negative $118 million compared to a negative $162 million in
the year-ago quarter, primarily due to the consolidation of Excite@Home.
Corporate and Other EBIT, excluding other income and asset impairment charges,
declined $239 million to a negative $253 million, compared with the year-ago
quarter. The decline was primarily driven by costs associated with AT&T's
corporate restructuring plan, a lower pension credit in 2001 and the impact of
the consolidation of Excite@Home.

AT&T Wireless Services second-quarter results will be reported separately on
July 24 by the newly independent company. 

AT&T's second-quarter earnings reflect the results of the now independent
company AT&T Wireless as "discontinued operations" in accordance with generally
accepted accounting principles.  As a result, AT&T Wireless revenue and expenses
are not included in the revenue and expense lines of AT&T's income statement,
and AT&T Wireless operating results are excluded from AT&T's earnings from
continuing operations.  AT&T Wireless earnings are represented in AT&T Common
Stock Group results as earnings from discontinued operations.  

Earnings per share from discontinued operations were $0.05, as a result of the
gain Wireless realized from the sale of its stake in Japan Telecom, partially
offset by AT&T Wireless'operating loss. 


2nd Quarter at a Glance  2Q01  Vs 2Q00 2nd Quarter Highlights 
AT&T Broadband Revenue  $2.6b   13.7% Continuing Operations Total Revenue $13.3b

AT&T Business Revenue   $7.1b  (1.7%)*Continuing Operations Reported EPS $(0.10)

AT&T Consumer Revenue   $3.8b (19.8%)*Continuing Operations EPS, excluding other
                                      income, asset impairment charges and      
                                      effects of AT&T Wireless exchange    $0.04
Continuing Operations 
EBITDA, excluding other               Total Assets                      $196.1b
income and asset        $3.9b (19.7)% Net Debt) **                      $ 43.6b
impairment charges                 
                                  
Continuing Operations EBIT,           Continuing Operations Cash EPS,   $0.16
excluding other income and            excluding other income, asset impairment 
asset impairment                      charges and effects of AT&T Wireless
charges                 $1.5b (49.6%) exchange                                  
                                                                          
 
                                      Capital expenditures                 $2.2b

 
* Pro Forma                          ** Includes AT&T Wireless net debt of $6.5 
                                      billion included in "net assets of        
                                      discontinued operations" and excludes     
                                      monetized debt and cash. 

THIRD QUARTER OUTLOOK:

AT&T said it expects AT&T Group pro forma revenue for continuing operations in
the third quarter to decline in a range similar to the second quarter of 2001,
and could be subject to further downward pressure due to possible further
weakness in the U.S. economy. EBITDA, excluding other income, is expected to be
similar to second quarter.

AT&T said it expects third quarter EPS from continuing operations, excluding
other income, to be in the range of $0.02 to $0.05 and cash EPS for continuing
operations, excluding other income, in the range of $0.14 to $0.17.

DEFINITIONS:

AT&T Group does not include the results of Liberty Media Group (LMG), which is
tracked as a separate class of stock. Earnings of AT&T Group are attributed to
either AT&T Common Stock Group or AT&T Wireless Group.

Cash EPS, excluding other income, refers to earnings per share excluding other
income, equity earnings (loss), the cumulative effect of accounting changes and
amortization of franchise costs, goodwill associated with acquisitions and other
purchased intangibles. 

EBIT refers to earnings before interest, taxes, the cumulative effect of
accounting changes and dividend requirements on preferred stock, the premium on
the Wireless tracking stock exchange and discontinued operations.

EBIT, excluding other income, refers to EBIT excluding other income and pre-tax
equity earnings (loss).

EBITDA refers to EBIT excluding depreciation and amortization, and minority
interest other than Excite@Home's minority interest.

EBITDA, excluding other income, refers to EBITDA excluding other income and
pre-tax equity earnings (loss).

EPS, excluding other income, refers to earnings per share excluding other
income, equity earnings (loss) and the cumulative effect of accounting changes
and the premium on the Wireless tracking stock exchange.

Pro forma revenue is adjusted for the acquisition of MediaOne, the elimination
of per line charges by the Federal Communications Commission, the consolidation
of At Home Corp. (Excite@Home), and closed cable transactions.

The foregoing are "forward-looking statements" which are based on management's
beliefs as well as on a number of assumptions concerning future events made by
and information currently available to management.

Readers are cautioned not to put undue reliance on such forward-looking
statements, which are not a guarantee of performance and are subject to a number
of uncertainties and other factors, many of which are outside AT&T's control,
that could cause actual results to differ materially from such statements. These
factors include the rate of decline of traditional long distance voice services,
technology change and substitution, the actions of competitors in all segments
in setting prices, conditions of excess capacity, and rates of implementation of
regulatory changes that favor competitors and promote remonopolization.

For a more detailed description of the factors that could cause actual results
to differ from forecast, please see AT&T's filings with the Securities and
Exchange Commission. AT&T disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.

EDITOR'S NOTE:

AT&T will announce second quarter 2001 earnings on Monday, July 23 at 4:15 p.m.
EDT.  AT&T executives will host an analyst conference call at 5:30 p.m. to
discuss the company's results.  To access the call, please dial 888-428-4470
(domestic) or 612-288-0340 (international).  A replay will be available
beginning at 10:00 p.m. EDT on Monday, July 23 until midnight on Wednesday, July
25.  To access the replay, please visit www.att.com/ir or dial 800-475-6701,
access code: 595760 (domestic) or 320-365-3844, access code:  595760
(international).

On Tuesday, July 24 at 1:00 p.m. EDT, AT&T will present a comprehensive
financial and operational update on its Broadband business via conference call
and web cast.  Executive team members from AT&T and AT&T Broadband will present
the current status and future view of the business and answer questions.  The
slide presentation referenced during the briefing will be available via AT&T's
web site shortly before 1:00 p.m.  Presentation slides and audio will also be
available for downloading.  To access the call, please dial 877-209-9920
(domestic) or 612-332-0725 (international) or web cast at www.att.com/ir.  A
replay will be available beginning at 5:00 p.m. EDT on Tuesday until midnight on
Thursday, July 26.  To access the replay, please visit www.att.com/ir or dial
800-475-6701, access code: 595485 (domestic) or 320-365-3844, access code:
595485 (international).


                                 AT&T Group
                  Combined Statements of Income (Unaudited)

                                     For the Three Months   For the Three Months

                                       Ended June 30, 2001  Ended June 30, 2000
 
Dollars in Millions (except per share amounts) 
 
Revenue                                         $ 13,326          $ 13,744
Operating Expenses
Costs of services and products                     3,410             3,009
Access and other connection                        3,105             3,527
Selling, general and administrative                2,810             2,357
Depreciation and other amortization                1,732             1,366
Amortization of goodwill, franchise
 costs and other purchased intangibles               618               345
Net restructuring and other charges                  287                 -
                                                --------            ------
Total operating expenses                          11,962            10,604
                                                --------            ------
 
Operating income                                   1,364             3,140

Other (expense) income                            (1,446)              346
Interest expense                                     761               568
                                                --------            ------
(Loss) income from continuing operations
 before income taxes, minority interest
 and net losses from equity investments             (843)            2,918
(Benefit) provision for income taxes                (872)            1,094
Minority interest income (expense)                   198               (46)
Net loss from equity investments                     278               188
(Loss) income from continuing operations             (51)            1,590
Income from discontinued operations - net of tax     218               177
Dividend requirements of preferred stock             236                 -
Premium on wireless stock exchange                    80                 -
                                                 -------            -------
(Loss) earnings available to
 common shareowners                               $ (149)          $ 1,767
                                                 -------           --------
 
  
 
AT&T Common Stock Group :
(Loss) earnings                                   $ (191)          $ 1,745

Weighted-average shares (millions)                 3,694             3,253
Weighted-average shares and
 potential common shares (millions)*               3,694             3,314
   
(Loss) earnings from continuing
 operations per basic share                      $ (0.10)           $ 0.49
Earnings from discontinued
 operations per basic share                         0.05              0.05
                                                 -------            ------
(Loss) earnings per basic share                  $ (0.05)           $ 0.54
        
(Loss) earnings from continuing
 operations per diluted share                    $ (0.10)           $ 0.48
Earnings from discontinued
 operations per diluted share                       0.05              0.05
                                                 -------          --------
(Loss) earnings per diluted share                $ (0.05)           $ 0.53
Dividends declared per share                    $ 0.0375            $ 0.22

        
AT&T Wireless Group:
Earnings                                            $ 42              $ 22
Weighted-average shares (millions)                   513               360
Weighted-average shares and
 potential common shares (millions)                  513               360
Earnings per basic and diluted share              $ 0.08            $ 0.06
   

*Weighted-average shares assumes dilution from the potential conversion of debt
and equity securities and the potential exercise of outstanding stock options
and other performance awards.