AT&T to Record $10 Billion in Charges for Fourth Quarter

AT&T - United States

AT&T is expecting to record a pretax loss of $10 billion in the fourth quarter. There is a pretax loss of eight billion dollars related to accounting adjustments for gains and losses on pension and benefit plans. Former employees are living longer and this is creating serious problems for the company. There is also a $2 billion non-cash charge because the demand of copper assets is decreasing day by day. According to the company the usage of smart phones has changed a lot. People don’t rely on the conventional copper landlines any more.

"During the fourth quarter, we performed an analysis of our network assets and determined that specific copper assets will not be necessary to support future network activity, due to declining customer demand for our legacy voice and data products and the migration of our networks to next generation technology,"

There are many telecommunication companies which are replacing copper lines with fiber optic lines these days.  According to the carrier it won’t affect operating results and margins. Stock of the company fell less than one dollar in after-hours trading on Friday. The carrier had to face a fourth-quarter loss of six and half billion dollars three years ago. In the 3rd quarter, the carrier recorded $33.25 billion in revenue and is expecting to post revenue of $35.68 billion in the 4th quarter.

AT&T is the second largest carrier in the United States and the Mexican carrier Lusacell is also acquired by AT&T.  It means nine million new customers for AT&T. Expanding business in that region can really prove a huge opportunity for the carrier.


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