Cable horrors slice $13.1bn out of AT&T
There goes another one...
AT&T Corp has swallowed a huge $13.1bn charge for the write-down in the value of its cable operations, and the New York-based carrier expects the revenue shortfall in the third quarter to be greater than the 6.1% slide recorded in the previous three months.
In the second quarter to June 30, the loss was $12.7bn, down from income of $167m on revenue down 8.7% at $12.1bn. At the mid-term stage, the loss was $13.7bn, up from a loss of $25m on revenue down 9.9% lower at $24bn. The current quarter includes goodwill and franchise impairment charges of $16.5bn, largely related to the write-down in the value of its cable interests.
AT&T's business unit saw second-quarter revenue decline by 3.8% to $6.7bn with a 12% decline in long-distance voice revenue only partly offset by growth in data/IP/managed services. For the full year, the unit expects a revenue decline in the 4.5% to 5% range.
Its consumer unit was a disaster area with revenue plunging 21.8% to $2.9bn, as consumers switched to communicating by the internet and mobile phones. A decline in the mid-20% is expected for the full year. Broadband is expected to show revenue growth in the low double-digits after recording a 9.8% increase in revenue to $2.5bn in the second quarter.