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AT&T stock hit a 30-year low recently over fears of its potential liability for contamination from lead-sheathed cables.
Dreamstime
AT&T
reported earnings for the June quarter that beat expectations on Wednesday despite a further slowdown in subscriber growth for its postpaid phone plans.
AT&T (ticker: T) reported adjusted earnings of 63 cents a share for the second quarter, down from 65 cents a share for the year-earlier period. Revenue came to $29.9 billion, up 0.9% from the prior year.
The company had been expected to report second-quarter earnings of 60 cents a share on revenue of $29.96 billion, according to a FactSet poll of analysts.
AT&T said it was on track to meet or better its previous guidance of $16 billion in free cash flow for the year. However it reported net additions of 326,000 customers to its postpaid phone subscriber plans, missing expectations of around 342,500 additions according to a FactSet poll.
Rival company
Verizon Communications
(VZ) beat expectations in its own earnings report earlier this week as it reported an unexpected increase in wireless subscriber numbers.
In its earnings report, AT&T didn’t provide any financial estimate of its potential liability for remediation of lead-sheathed cables, which has weighed on the stock in recent weeks
The Wall Street Journal reported in early July that thousands of miles of copper cables wrapped in lead were still in service throughout America, with high levels of lead contamination in the immediate environment.
AT&T shares hit a 30-year low in reaction to the report over fears it could be forced to pay for removal of the cables it owns and face potential lawsuits over the related environmental and health risks. However, the stock has partially rebounded as analysts have revised downwards their estimates on the potential costs exposure.
AT&T has previously less than 10% of its 2 million miles of copper cabling is sheathed in lead, with more than two-thirds of that buried in a conduit and the rest being overhead cables. It said on Tuesday that recent tests at a pair of sites where there were lead-clad cables didn’t deem the cables to be a risk to public health.
Write to Adam Clark at adam.clark@barrons.com