AT&T Broadband Dips in 1Q
By Mike Farrell -- Multichannel News, 4/24/2001 5:49:00 PM
AT&T Broadband turned in another quarter of declining cash flow, but CEO Dan Somers vowed that future results would be better.
For the first quarter ended March 31, AT&T Broadband reported earnings before interest, taxes, depreciation and amortization of $394 million, down 5.1 percent from $415 million in the prior quarter. Compared with the same period last year, EBITDA fell 22.3 percent from $507 million. Revenue growth at the unit was 10.9 percent to $2.5 billion from $2.2 billion.
Cash-flow margins at the Broadband unit were also down in the period to 16
percent from 22.8 percent in the same period last year, mainly due to additional
expenses associated with the rollout of broadband telephony, higher programming
costs and
increased restructuring charges, the company said in a
statement.
Cash-flow margins at other large cable operators are usually in the 40 percent to 49 percent range.
'I'm confident that we have reached the low-water mark in terms of margins,' Somers said in a conference call with analysts. He added that while cash-flow results were disappointing, he believes the company has turned the corner and the future
'will include profitability growth well above industry rates.'
AT&T Broadband added 206,000 new high-speed-data customers and 340,000 digital-cable subscribers in the quarter. Telephony customers were up 153,000, reaching 700,000 at the end of the quarter. Basic subscribers were flat at 15.9 million.
Overall, AT&T Corp. reported a loss of $366 million, or 10 cents per share, compared with a profit of $1.74 billion, or 54 cents per share, a year ago. Revenue at the company rose 5.4 percent to $16.8 billion. The company's stock closed up 14 cents at $22.12 per share Tuesday.
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