AT&T; Reports 1st-Year Profit of $1.38 Billion

NEW YORK —  American Telephone & Telegraph Co. said Monday that it earned $1.38 billion in 1984, its first year of operation after divesting its 22 Bell System telephone companies.

The profit trailed both AT&T;’s initial forecast and current estimates of some Wall Street analysts, and AT&T; Chairman Charles L. Brown said: “We expected to do better.”

“We intend to do better in 1985 and better still in the years ahead,” Brown said in a statement. In the meantime, he said, “AT&T; remains a financially strong company with nearly $40 billion in assets and excellent prospects in rapidly growing markets.”

Shortly before the breakup occurred, AT&T; had projected a profit of $2.1 billion.

Revenue for the year totaled $33.2 billion.

For the fourth quarter alone, AT&T;’s profit was $379 million on revenue of $8.41 billion.

The fact that AT&T;’s actual 1984 profit trailed the company’s initial projection was not a surprise. Brown had said last April, after announcing AT&T;’s first-quarter results, that the company did not expect to meet the initial earnings forecast.

Through the rest of the year, AT&T;’s earnings varied widely, exceeding and then falling short of Wall Street forecasts.

“This was their first year as an independent company; they had no track record to measure how they might perform,” said Steven Chrust, who follows AT&T; for the investment firm Sanford C. Bernstein & Co.

“Given the radically changing regulatory environment, it would have been virtually impossible to create a smooth earnings pattern,” he said.

AT&T; said Monday that the forecast it originally made for 1984 was based “on the best assumptions possible at that time, particularly with regard to regulatory matters. Regulatory decisions did not match those assumptions, AT&T; said.

Specifically, AT&T; complained of delays by the Federal Communications Commission in resolving a dispute on the fees that AT&T; and other providers of long-distance telephone service pay to local telephone companies for access to lines.

The delay, AT&T; charged, resulted in higher access fees for AT&T; than the company had expected.

Separately, BellSouth Corp., one of the seven regional holding companies set up to operate the 22 divested Bell System companies, said its 1984 profit totaled $1.26 billion on revenue of $9.52 billion. In the fourth quarter, Atlanta-based BellSouth said it earned $362.8 million on revenue of $2.52 billion.