On March 12, 1888, a huge blizzard hit New York, blacking out phone service along the East Coast that took months to restore. The dedication of its work crews inspired American Telephone & Telegraph Co. to have F. L. Merrill paint "The Spirit of Service."

AT&T marks its 100th year as a corporation today and for that first century, the spirit of service was one of its symbols.

Another was its stockholder dividends, which have marched upward through the years as resolutely as the repairman battling the drifts in Merrill's painting.

In fact, if a shareholder had hung onto one $100 share of AT&T stock when it was first issued in 1881 -- and reinvested every one of the 410 consecutive quarterly dividends -- he would own 32,000 shares worth nearly $2 million.

But now AT&T is besieged with a different kind of adversity; it is switching gears from being a sheltered monopoly to a formidable contender in a coldly competitive telecommunications world.

AT&T has gone through a tough first year since the breakup of the Bell System. Net earnings in 1984 barely scratched $1 billion, less than half the $2.1 billion AT&T initially forecast. The company paid out $1.20 per share in dividends but earned only $1.25 per share.

AT&T is facing intense competition in the long-distance market for both residential and business customers and is offering new services tailored to business. It is getting into new computer areas and digital network and business automation systems.

But AT&T's rosy financial picture has radically changed and the company will not predict what its dividend payments will be in the future.

"We have a long history of maintaining our dividends and certainly expect to continue to justify the shareowner's investment," said Pic Wagner, an AT&T spokesman. "At the same time, the marketplace and the regulators are the factors that govern our earnings and dividend payouts."

Analysts say AT&T can afford its first dividend payment of 1985, scheduled for May 1.

"You've got a company that just barely earned their dividend over the last year and that has caused them concern," said John S. Bain, an analyst with Shearson Lehman Bros. Inc. "But they have cash."

Nevertheless, this year may be a departure from AT&T's tradition of steadily increasing dividends. The company may have to freeze dividends for as long as five years, analysts say.

Steven G. Chrust, an analyst with Sanford C. Bernstein Co., said AT&T wants to pay out a much lower dividend to be consistent with other "high-tech" companies. The company would like to see a payout ratio close to 40 percent of earnings, he said.

But earnings would have to rise to more than $3 to achieve the ratio, noted Chrust. "Our view is that earnings might be $3 in five years." It could take even longer the for the company to increase the dividend.

Analysts say more people held onto AT&T stock than sold it at the time of the Bell breakup. But that wasn't necessarily the smart thing to do.

"Investors who owned AT&T prior to the breakup should have sold immediately and put it into the regional Bell companies. The great paying power of the dividend is in those companies," said Bain.