Disconnections cut AT&T earnings

SAN ANTONIO -- AT&T Inc.'s shares tumbled Tuesday after Chairman and Chief Executive Randall Stephenson said the telecom carrier is experiencing some slowdown in its broadband and traditional wire phone sales to individuals.

Speaking at Citigroup Inc.'s Entertainment, Media and Telecom Conference in Phoenix, Stephenson said the bulk of the weakness is coming from service disconnections due to nonpayment on those lines.

AT&T's shares fell $1.87, or 4.6 percent, to close at $39.16, bouncing off an initial dive that sent the stock down 9.5 percent.

The slowing U.S. economy has not hurt the company's wireless business or its sales to large corporations or small- and medium-size businesses, Stephenson said.

The consumer broadband and wire-line business makes up less than 20 percent of revenue for AT&T, the nation's largest wireless carrier with 65.7 million subscribers.

AT&T did not change its guidance of double-digit earnings-per-share growth for 2007 and 2008. AT&T is scheduled to report fourth-quarter earnings Jan. 24.