Shares of AT&T Corp. fell after Salomon Smith Barney analyst Jack Grubman lowered his recommendation on AT&T from “outperform” to “buy” on Friday. The stock was trading at $26.94 at RCR Wireless News press time, down $1.94 from the previous day’s close.
Grubman also cut his 2000 earnings estimate by 8 cents per share to $1.65 and his 2001 projection by 42 cents per share to $1.55. He cited lowered expectations for the consumer and long-distance segments as reasons.
The downgrade comes amid speculation that AT&T’s board of directors is considering spinning off the company’s long-distance business to shareholders rather than selling it outright. AT&T’s stock value has been on a steady decline for several months due to the struggles of its long-distance and cable TV businesses, and the slipping dominance if its mobile business, AT&T Wireless Services Inc.
AT&T has made no official comment on the rumors.
