AT&T PROFIT RISES AS COSTS FALL

AT&T Corp., the biggest American long-distance telephone carrier, said fourth-quarter earnings rose for the first time in five quarters as costs fell and the company won business and government clients.

Net income jumped 84% to $625 million, or 78 cents a share, from $340 million, or 43 cents, a year earlier. Sales fell 10% to $7.27 billion, the 20th straight drop, Bedminster, N.J.-based AT &T said in a statement today.

Sales will decline more than analysts expected this year, and AT&T will cut more jobs than it planned in October to make up for the shortfall, the chief financial officer, Tom Horton, said in an interview. The company lowered operating expenses by 18% in the quarter, after an $11.4 billion asset write-down reduced depreciation costs.

The long-distance industry has been hurt by overcapacity and falling prices as consumers use cell phones and e-mail and as local phone companies add long-distance to their package of services.

– Bloomberg News

COURT: DON’T BLAME ANALYSTS

A federal appeals court agreed yesterday that a lower court was right to throw out class-action lawsuits blaming investors’ losses in two Internet companies on failures by onetime star Internet analyst Henry M. Blodget.

The 2nd U.S. Circuit Court of Appeals upheld the findings of the late U.S. District Judge Milton Pollack, who tossed out the lawsuit brought by investors against Blodget and his former employer Merrill Lynch & Co. Inc.

A three-judge appeals court panel wrote that the lawsuits blaming Merrill Lynch and Blodget for misleading investors failed to show that the alleged misrepresentations and omissions in research reports caused the losses.

The lawsuits had alleged that Mr. Blodget and other research analysts recommended that investors buy shares of 24/7 Real Media Inc. and Interliant Inc. even though they did not believe the companies were good investments.

– Associated Press

N.Y. UNEMPLOYMENT RATES RISE

New York State’s unemployment rate rose to 5.3% in December from 4.9% in November after months of declines, according to a report issued by the state Labor Department yesterday. New York City’s unemployment rate increased to 6.2% in December from 5.4% in November, the Labor Department said. The figures compare to a 5.4% national unemployment rate. The educational and health services industries gained the most jobs in December, adding 26,100 the report said. New York state’s manufacturing sector suffered the most, losing 26,100 jobs during the month, the Labor Department reported.

– Staff Reporter of the Sun

DELTA REPORTS WORST YEAR EVER

Delta Air Lines yesterday reported a $2.2 billion fourth quarter loss, giving it what was easily the industry’s worst ever annual financial performance. The nation’s third-largest carrier blamed high fuel prices, low fares and hefty charges for the poor results, which missed even Wall Street’s reduced expectations. Delta CEO Gerald Grinstein told analysts that “if Delta is to survive, we must develop a fundamentally different way of doing business, which is what we’re doing.” Delta has lost $8.5 billion since 2001 and nearly fell into bankruptcy 2 1/2 months ago before winning deep concessions from pilots and fresh financing from creditors. For the three months ending Dec. 31, the Atlanta-based company said its net loss was $2.21 billion, compared with a loss of $332 million in the same period a year ago. The results pushed the airline’s total losses for 2004 to $5.2 billion, dwarfing the $3.5 billion loss posted by American Airlines’ parent for 2002.

– Bloomberg News