AT&T Corp.’s board of directors unanimously elected C. Michael Armstrong chairman and chief executive officer of the company, effective Nov. 1.
AT&T was widely viewed to be under pressure to partner with someone after its nearest rival in the long-distance arena, MCI Communications Corp., became the subject of a bidding war involving GTE Corp., WorldCom Inc. and British Telecommunications plc. The company instead appeared to focus its efforts on tying up a three-month long search for a new CEO.
Reports of talks between AT&T Corp. and Vodafone Group plc, the United Kingdom’s largest mobile telephone company, were denied by Vodafone spokesman Mike Caldwell.
Armstrong succeeds Robert E. Allen, whose tenure at AT&T included the spinoff of Lucent Technologies Inc. Allen will become chairman of the board’s executive committee until he retires in February.
Armstrong, 59, has been chairman and CEO of Hughes Electronics Corp. since 1993. He also spent 31 years with IBM Corp., where he served as chairman, president and chief executive officer of the company’s World Trade Group.
“Mike Armstrong is a perfect match with the requirements the board identified in our comprehensive search for a chief executive to succeed Bob Allen,” said Walter Elisha, chairman of the search committee formed by AT&T’s board to find a new CEO. “In Mike, we have found a leader with exceptional technological vision, a good understanding of the forces transforming the communications services industry and a strong record of accomplishment.”
The search committee included Elisha; Kenneth Derr, chairman and CEO of Chev-ron Corp.; Donald McHenry, president of the IRC Group; Ralph Larsen, chairman and CEO of Johnson & Johnson; Michael Sovern, president emeritus and Chancellor Kent professor of law at Columbia University; and Thomas Wyman, senior adviser of SBC Warburg Inc.
AT&T’s board also announced that John D. Zeglis was elected president and would continue as a member of the board.
AT&T packaged the news with the announcement that it plans to sell its Universal Card credit-card business and a customer-service unit, both based in Jacksonville, Fla. The company said it expects to complete the divestitures by mid-1998.
3Q earnings down
The company also announced a 15-percent decrease in third quarter earnings to $1.22 billion, or 75 cents per share, compared with earnings of $1.43 billion, or 89 cents per share last year.
Total revenues for the company reached $13.38 billion, 1.2 percent more than revenues of $13.23 billion for the third quarter last year. Revenues from wireless services during the quarter totaled $1.1 billion, 10.4 percent more than revenues of $994 million during the third quarter last year.
AT&T said its consolidated subscriber base grew 20.6 percent to nearly 5.8 million. Net additions during the quarter were 173,000, down 29.3 percent from third quarter last year.
