American Telephone and Telegraph Co. yesterday reported the highest quarterly earnings in its 102-year history.
Despite his repeated complaints about increasing competition to the phone monopoly as a result of federal government and court actions, AT&T Chairman John deButts yesterday told 7,275 shareholders attending its annual meeting here that earnings for the first three months of 1978 totalled $1.28 billion, up 20.6 per cent over the same quarter of 1977. Earnings per share for the quarter were $1.91 compared with $1.65 for the same period a year ago.
Operation revenues totalled $9.9 billion in the first quarter, up 12.8 percent from the same quarter a year ago.
"Our experience thus far suggest that 1978 will be a year of stronger growth than we anticipated at its outset," deButt predicted. Although he had cautioned before that it would be "unrealistic" to expect the same degree of growth in demand that the company saw in 1977, deButts said yesterday the company had "yet to experience any significant slackening in the growth of demand for our services."
Overall volume of business is up by 10 percent and long-distance calling is up 13 percent over a year ago: only the rate at which residential customers are putting in extension telephones has "softened," he said.
Because business is better then predicted, deButts announced that AT&T will increase capital spending by $600 million this year form the $12.8 billion it announced earlier. "The difference is almost entirely attributable to revised estimates of growth by our operating telephone companies, estimates that are based on observations at the grass roots," he said.
In what must be the granddaddy of all annual meetings, AT&T spares little expense. To set up this meeting - the largest since a 1961 meeting in Chicago when AT&T provided its last "luncheon meeting" - AT&T spent $250,000. AT&T has about 170,000 shareholders - out of total of 2.9 million - living within 50 miles of the Miami Beach convention center where the meetings was held.
On the average, the shareholders in attendance appeared to be a bit older than the shareholders at recent meetings in other cities, reflecting the large retirement community here, and were dressed more casually. In deference to Miami's large Spanish-speaking population. AT&T provided interpreters to aid Spanish-speaking shareholders and reporters in asking questions at deButts before the meeting.
Perhaps reflecting their age, shareholders, who asked questions from five glass-enclosed telephone booths, asked more questions than usual about phone booths equipped for persons wearing hearing aids and bulk and small print of Miami's elephone books. A number of shareholders complained about the 25-cost of pay phone calls in Florida.
In his comments and answers to questions yesterday, deButts:
Said AT&T has asked for a stay and will appeal last week's decision by the U.S. Court of Appeals ordering AT&T and the Federal Communication Commission to stop blocking long-distance telephone services that MICI Telecommunications Corp. is trying to offer.
Complained that AT&T is losing between $400 million and $500 million annually in business to its new competition, although he indicated that almost 10 percent of the customers once lost have returned to AT&T.
Said AT&T is in the process of a fundamental restructuring of its operating and marketing departments, now organized along functional lies,
Applauded President Carter's fight against inflation and pledged "extraordinary efforts to meet our earnings objectives to no more resort to price increases than is absolutely necessary." (In response to questions, AT&T officials said that, so far in 1978, rate increases totalling $135.9 million have been authorized in six jurisdictions while increases pending in 15 other jurisdictions would total $1.38 billion.
Although he complained about increasing competition, and expecially about the Justice Department's monopoly case against the company, deButts appeared in his opening remarks to be less strident about it than in previous years,
Stockholders yesterday accepted a management proposal to provide long-term financial incentives to reach specific objectives in service and earnings that could provide executives and officers up to $1.6 million and all Bell Systen executives and officers up to $3.8 million. Under another short-term, broader incentive plan. AT&T could pay out $1.9 million this year to company executives.
Shareholders also adopted another management proposal to authorize the sale of new common sales to an employe's savings plan about 250,000 employes considered to be management already have such a program; the new program would extend it to more than 700,000 non-management employes.