AT&T to boost dividend as earnings decline

AT&T Corp. plans to boost its dividend for the first time since slashing the quarterly payout in early 2001, signaling surprising confidence in the company’s prospects even as its core telephone business continued to deteriorate.

The announcement Thursday came as AT&T posted an 11 percent decline in second-quarter earnings and an 8 percent decline in revenues.

The drop in revenue was driven by fierce competition and price wars in long-distance calling, as well as overall economic weakness that kept a lid on spending by high-volume business customers, CEO David Dorman said.

But despite the bleak backdrop, AT&T said its cost-cutting efforts have enabled it to generate enough cash to continue to invest in the business and reward shareholders.

The company said it planned to increase the quarterly dividend by 5 cents per share to 23.75 cents, beginning with the payment scheduled in November.

Investigation

Four former executives charged in Charter case

Four former top executives of Charter Communications, the nation’s third-largest cable television company, were charged Thursday with scheming to inflate the company’s revenues and subscriber numbers, authorities said.

Former chief operating officer David Barford, 44, and former chief financial officer Kent Kalkwarf, 45, were charged with 14 counts of mail fraud, wire fraud and conspiracy to commit wire fraud.

Former senior vice presidents David McCall, 48, and James Smith, 55, were indicted on eight counts each of wire fraud and conspiracy for a 2001 scheme to inflate Charter’s subscriber numbers.

Finances

Mortgage rates inch up

Rates on benchmark 30-year mortgages climbed for the fifth week in a row, rising this week to the highest level since the middle of January, a trend that is slowing — but not stopping — refinancing activity.

The average rate on 30-year fixed-rate mortgages for the week ending July 25 was 5.94 percent, up sharply from last week’s rate of 5.67 percent, Freddie Mac, the mortgage giant, reported Thursday in its weekly nationwide survey.

Several factors have contributed to the recent rise in mortgage rates, economists said. The contributing factors include: signs that the economy is gaining traction; concern about swelling federal budget deficits; and disappointment on Wall Street that the Federal Reserve didn’t make a bolder cut to short-term rates on June 25.

Wall Street

Earnings of interest

Serologicals Corp., which is building a manufacturing plant in the East Hills Business Park, reported Thursday that earnings fell in the second quarter to 5 cents per share, down from 15 cents per share in the same period a year ago.

SBC Communications, which operates local and long-distance telephone services in the area, reported earnings declined to 42 cents per share compared to 53 cents per share a year earlier.

Raytheon, which is a major employer in the Wichita area, reported earnings of 24 cents per share compared to a loss of 33 cents per share a year earlier.