Shares in AT&T slumped 8% Tuesday as the telecom giant posted a $12.7 billion second-quarter loss including a massive writedown of cable-television assets ahead of a sale of those systems to Comcast.
New York-based conglom could have avoided its third consecutive quarterly loss had it not been for $13.1 billion in writedowns. Latest red ink compares with a $191 million loss in the year-earlier period.
In the latest quarter, AT&T took an $11.8 million writedown on its cable systems related to changes in accounting rules eliminating the amortization of goodwill. Conglom also took a $1.3 million writedown on underperforming investments in some outside cable operations.
Conglom is skedded to sell Comcast its array of cable-TV systems — the nation’s largest — for $24.5 billion. But execs revealed Tuesday that the AT&T Broadband cable unit lost 125,000 cable subs in the second quarter, and that news helped undermine cable stocks on the day.
Comcast shares slid 13% and Cablevision’s tumbled 20%. AT&T shares closed down 72¢, or 8%, at $8.80.
AT&T’s revenue fell 6% in the second quarter to $12.1 billion amid a continuing slide in long-distance revenue. Despite the loss of subs in the quarter, AT&T Broadband revenue actually rose 10% to $2.5 billion thanks to the rollout of deluxe services.
Execs said they expect companywide revenue to fall again in the third quarter. Conglom’s bottom-line perf exceeded Street expectations for the second quarter, excluding the pair of writedowns.