Out With The Old, In With The New
Several high-profile communications companies
released quarterly earnings and a pattern has emerged that suggests
companies riding the still new wave of communications technologies and
entrepreneurial deal-making are faring better than companies saddled with
older-world product lines and business plans.
The Dow is down 39 at 9338, the S&P 500 is down
3.47 at 1086.43, and the Nasdaq is up 5.70 at 1713.03.
AOL Time Warner
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breakthrough deal with a Chinese TV station. The deal could provide the
world’s largest media and communications firm with access to the world’s
largest population. The deal represents the potential to add millions of new
subscribers. AOL is up 4% to 32.90.
AT&T Wireless
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better-than-expected earnings, reporting a 3 cent gain rather than a
loss. Up 6% at 13.71, the AT&T spin-off also attributed its better
performance to adding new customers.
SBC Communications
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among Dow components, down 6.5% to 38.68 after brokerages Merrill Lynch and
Goldman Sachs downgraded the telecom. The firm complained of the deteriorating
performance of its Baby Bell holdings and blamed the government for SBC’s
slow roll out of new products such as DSL.
Another telecom-related company, gear maker Lucent
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fell as much as 5%, took a wider loss, as well as an $8 billion charge for
restructuring. Poor management and poor product choices have hampered
performance as the 1996 AT&T spin-off has failed to adopt to a rapidly
changing communications environment. Lucent still seems to have found
rock-bottom support two points lower at $5 and is trading at 6.68.