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Business Briefs

Reported by Star-Bulletin staff & wire

Monday, October 23, 2000

AT&T considers 4-way breakup

NEW YORK -- Board members of AT&T Corp., the nation's largest long-distance telephone service and cable television provider, intend to consider dividing the company into four distinct businesses, according to reports.

The split would create separate companies specializing in business services, wireless, consumer long-distance, and "broadband" delivery of TV, Internet and phone services over cable lines, The New York Times and The Wall Street Journal reported in today's editions. The board met today.

The company's biggest and most profitable unit, the Business Services department, which caters to corporate customers, would become the new AT&T and would create brand-licensing and commercial agreements with the three other businesses. AT&T officials declined to comment on the proposed plan.

If the plan, called Project Grand Slam, is approved, an announcement could be made as early as Wednesday. Other options the board were to consider include leaving AT&T intact or spinning off one or more new businesses, the reports said.

Under the split-into-four proposal, AT&T's wireless and cable TV operations would become separate companies over the next one to two years. The company's more than 60 million telephone users would not feel much immediate impact from the plan.

Lucent dumps CEO as profits disappoint

NEW YORK -- Lucent Technologies Inc. fired its top executive today and later announced a $225 million fiscal fourth quarter loss. The company also said profits excluding some expenses dropped as sales of some products fell.

Richard McGinn will be replaced as chairman and chief executive temporarily by Henry Schacht, a former Lucent chairman who will lead the search for a new leader at the company, whose stock is the second most widely owned in the nation. The sudden ouster came as Lucent was forced to confess yet again that it hasn't been able to capitalize on the opportunity of a lifetime even though the former AT&T Corp. unit remains an undisputed leader in telecom technology.

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Of Mutual Concern

News for mutual fund investors

Magellan pares Microsoft, Texas Instruments, Intel

BOSTON -- Intel Corp., Microsoft Corp. and Texas Instruments Inc. fell from Fidelity Magellan Fund's top 10 holdings in the third quarter, replaced by EMC Corp., American International Group Inc. and Sun Microsystems Inc. The changes were disclosed in Fidelity Investments' October Mutual Fund Guide.

Robert Stansky, manager of the $103.6 billion fund made a "prescient" sale of Intel, which has lost 42 percent of its value since its Aug. 31 peak, said Jim Lowell, editor of Fidelity Investor, a monthly newsletter based in Needham, Mass. Intel, the fund's third-largest holding as of June 30, was absent from the Sept. 30 top-10 holdings list, according to the guide. Stansky also reduced his holdings to 320 from 373.

"He's doing what he has traditionally done, which is just about this time consolidate his portfolio and let his positions hopefully have a bigger impact," Lowell said.

Magellan, the biggest actively managed fund, was off 3.2 percent this year through Friday, beating the Standard & Poor's 500 index's 4.9 percent drop.