AT&T Corp. will take a first quarter charge of $740 million to $780 million due to financial troubles at Excite@Home Corp., contributing to a loss for the quarter, The Wall Street Journal reports.
AT&T said the charge will reduce its first-quarter results by $280 million to $320 million. The telecom giant revealed the charge in a filing with the Securities and Exchange Commission after the close of the market on Thursday. AT&T, which owns a 23% economic interest in the high-speed Web service provider, has said it expects earnings, excluding charges, of $150 million to $263 million. Its quarterly earnings are due out on Tuesday.
Earlier this week, Excite@Home warned it was in a cash crunch and expects to have a loss of 14 cents to 15 cents a share in the first quarter, instead of the 13-cent loss that was expected by analysts. The company also estimated that revenue will be lower than expected. As a result, the Redwood City, Calif., company plans to take a charge associated with the value of their media business. And AT&T will, in turn, write down the value of its interest in the Internet company. AT&T said the value of its stake in Excite@Home to $450 million and $490 million for an investment once valued at $2.1 billion.