AT&T says it will take a fourth-quarter hit of about $10 billion due mostly to pension obligations that were larger than expected.
That mirrors an announcement made by Verizon earlier this month. Both companies also said that Hurricane Sandy damage in the Northeast took its toll on their finances; throw in smartphone costs that were higher than expected for AT&T and you’re bound to see some less-than-fabulous numbers overall when the carriers release their earnings reports later this month.
AT&T expects to report a $175 million reduction in operating income due to storms which damaged cellphone towers and caused numerous service outages in October and November. And while record sales of smartphones is great, they can also reduce profit for the carriers which provide big subsidies to keep the prices reasonable for customers.
An analyst with Pacific Crest Securities said the loss is not a "real huge negative, but a little sobering," according to a Reuters article.
AT&T stock was virtually unchanged on the news ($33.21 per share) as of 1:13 p.m. ET Friday.