updated 10/21/2004 9:34:09 AM ET 2004-10-21T13:34:09

AT&T Corp. swung to a third-quarter loss of $7.1 billion after recording huge charges related to the company's retreat from traditional telephone services, which has included at least 7,500 more job cuts and a writedown in the value of the company's national network.

The loss amounted to $8.95 per share for the July-September period, which reflects $12..5 billion worth of charges as well as some related benefits such as a $537 million drop in depreciation expenses on the assets written down.

Excluding the charges, AT&T would have reported a profit of $593 million or 75 cents a share. In the same quarter last year, AT&T earned $418 million, or 53 cents a share.

Third-quarter revenues totaled $7.6 billion, down 11.7 billion from $8.65 billion a year earlier, as the long-distance business extended its multiyear decline. Broken down, AT&T Business Services generated $5.6 billion of the revenues and AT&T Consumer Revenues brought in about $2 billion.

AT&T, still the nation's largest long-distance company, had warned two weeks ago that it would be slashing the book value of its assets by $11.4 billion now that its network is expected to carry far less consumer voice traffic.

The decision to cut spending on new customer acquisitions followed a federal court decision that will make it more expensive for AT&T to sell local service by leasing residential lines from the four regional Bells _ who at the same time are luring away AT&T's long-distance customers.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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