US long-distance telephone and cable-television giant AT&T today posted a $12.7 billion second-quarter loss after charges to write down the value of some of its assets.
Revenues also fell as telephone sales and calling volumes dropped.
But AT&T showed some signs the worst may be over. The company said the rate of customers shifting to wireless telephones and electronic mail - and away from long-distance calls - had begun to stabilise.
AT&T also benefited from the financial woes of rivals such as WorldCom, which filed for bankruptcy on Sunday, as customers looked for alternative service providers.
Including $13.1 billion in charges for goodwill and franchise impairments, AT&T posted a net loss of $3.49 per share. That compared with a loss of $191 million, or 10 cents a share, a year ago.
Revenue fell 6.2 per cent to $12.1 billion. The company expects third-quarter revenue to fall at a slightly higher rate than the drop seen in the second-quarter.
Shares of AT&T have fallen 47.5 per cent so far this year. The company plans a one-for-five reverse stock split later this year to bulk up its stock price.
Sales to residential customers plunged 21.8 per cent to $2.91 billion in the second quarter. The company has been hurt as customers shifted to wireless telephones and Internet services, and away from long-distance calls.
But AT&T said the rate of wireless and Internet substitution had begun to stabilise. As a result, it said it expects full-year consumer revenues to decline at the "favourable end" of the previously stated mid-20 per cent range.