AT&T might sell Yellow Pages

Friday, 27 January 2012 09:44

The head of AT&T on Thursday suggested that the company might sell its directory business, which employs more than 500 people in St. Louis.

The company also reported a $6.68 billion loss for the December quarter, fueled largely by a $4 billion cancellation charge paid after the failure of its planned purchase of T-Mobile.

But the loss also included a non-cash charge of about $2.9 billion to reflect the falling value of its directory business, which includes the Yellow Pages phone book and its Internet incarnation.

AT&T expects earnings per share to grow by a mid-single-digit percentage in 2012, a bit lower than analysts had expected.

In a morning conference call with analysts, AT&T CEO Randall Stephenson labeled the directory business as underperforming.

"That's one area that we're going to obviously take a very hard look at, and while I don't want to give any indication on M&A activity, it's one of these areas that we're going to have to decide, do we keep it, do we restructure it, as we move forward," he said. M&A means mergers and acquisitions, the buying and selling of companies.

AT&T declined to give any further details on the directory business presence in St. Louis, or the company's intentions. It also declined to say how many people the business employed locally.

However, that business employs 575 union members in St. Louis, plus management personnel, said Jim Kolve, executive vice president of Communications Workers of America Local 6300. The local workers handle sales, accounting, customer service and part of production, working on both the print director and the Internet.

AT&T's directory business is the most profitable in the industry, said analyst Juli Niemann of Smith Moore & Co.

"This was a cash cow feeding tons into the company," she said.

The phone company might use money from the sale to fund upgrades of its phone system and build its video business.

"They have big debt and an underfunded pension," Niemann said. "They need the cash."

The directory business is part of AT&T's Advertising Solutions unit, which reported quarterly revenue of $781 million versus $926 million a year earlier.

Source: stltoday.com