Don't expect

AT&T

(T) - Get Report

to right last quarter's

wrongs just yet. The phone giant may be preparing to guide earnings estimates lower for the second time this year, says an influential telecom analyst.

In a report issued Friday by

Salomon Smith Barney

, analyst

Jack Grubman says AT&T has failed to gain any "traction" in long distance and data services to businesses. As a result, Grubman cut his 2000 earnings estimate by 4 cents to $2.29 and his 2001 estimate by a dime to $2.45. The analyst has a buy rating on AT&T, and his firm helped underwrite the offering of its wireless tracking stock this spring.

AT&T shares were flat Friday at 33 11/16, near their 52-week low and barely half of their April high.

An AT&T spokesman declined to comment on Grubman's report but said: "We are focused on executing our growth strategy. Let's leave it at that." AT&T is scheduled to report earnings before the market opens July 25.

In May, AT&T lowered its earnings guidance for the year by 5%, citing a faster-than-expected decline in long-distance revenue. The company also cited problems in its business-solutions division, including a rough restructuring of sales and management staff, the integration of its

Concert

international joint venture with

British Telecom

(BTY)

, and the loss of a huge government contract.

AT&T shares dropped 14% in a day in the wake of that shortfall.

AT&T Chairman and CEO C. Michael Armstrong told analysts during a May 2 earnings conference call, "We took our foot off the accelerator." Armstrong also said the missteps in the business-services division were being addressed, though the company lowered its expected growth rate in that division to 8% from 10%.

Grubman says AT&T's mishandling of big-ticket accounts in the first quarter of the year was a boon to rivals

Worldcom

(WCOM)

and

Qwest

(Q)

, which won over some dissatisfied AT&T customers. He says the slippage continues and will spill over into 2001.

"The stock is absolutely dirt cheap, but will stay that way until visibility of operational turnaround occurs," Grubman wrote.

AT&T's woes have only mounted this year.

Verizon

(VZ) - Get Report

, previously known as Bell Atlantic, opened 2000 by getting the green light to offer long-distance service in New York and immediately began plucking customers from Ma Bell. In January, heads began

rolling in AT&T's long-distance unit. In April, AT&T sold shares tracking its wireless business, but the Street wasn't

impressed, sending the new stock down more than 27% from its debut high. And last month,

TheStreet.com

reported that AT&T was

huddling with bankers and consultants to determine whether to set up a tracking stock for its long-distance business or sell it outright.