AT&T

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posted mixed fourth-quarter results Thursday and set a plan to retire $3 billion in debt.

For its fourth quarter ended Dec. 31, AT&T earned $340 million, or 43 cents a share, from continuing operations. That reverses a steep charge-laden year-ago loss of $611 million, or 79 cents a share, and beats the Thomson First Call analyst consensus estimate of 41 cents a share.

But revenue declined more than expected, sliding 12.8% from a year earlier to $8.1 billion, leaving the company some $200 million short of the Wall Street estimate. AT&T cited continuing declines in long-distance voice revenue. The company said AT&T Business posted latest-quarter revenue of $5.9 billion, while AT&T Consumer's revenue was $2.2 billion.

"AT&T's fourth-quarter results reflect our ongoing ability to execute in a difficult market while transforming our business to meet the challenges of an evolving and increasingly competitive industry," said CEO David W. Dorman. "Moving forward, we will continue to leverage innovation and investment to extend AT&T's competitive differentiation with customers and to strengthen our position as industry leader and provider of choice."

The company also trimmed 2004 guidance, saying it expected a full-year revenue decline of 7%-10% from 2003 levels. That would put full-year consolidated revenue at $31.5 billion, about a billion dollars short of the Wall Street estimate. AT&T also called for a 4%-7% decline in business revenue and a 15%-17% decline at the sagging consumer unit.

The company said it would buy back up to $3 billion of debt depending on market conditions. AT&T ended the year with $8.8 billion in net debt.

AT&T closed Wednesday at $21.25.