At&T; Projects Lower Earnings

AT&T Corp. told its 3.3 million shareholders today that earnings in both the third and fourth quarters likely will be as much as 10 percent below analysts’ expectations.

The company’s stock tumbled in response, dropping about 9 percent in heavy morning trading, or $5 per share to $52.12-1/2.

AT&T cited intense competitive pressures, particularly in its consumer long-distance operation, and said it would fight back with a new simplified pricing plan designed to lure consumers confused by more complex alternatives.

AT&T chairman Robert E. Allen said in a letter to shareholders that pressure from rivals was expected to continue for the rest of the year.

Company executives, speaking to reporters, blamed a loss of customers to aggressive long-distance competitors. But they also said more customers had come to AT&T than it lost in the most recent quarter.

Its business long-distance and wireless services are growing at a healthy rate, they said.