Telecom giant AT&T Inc. (NYSE: T) said Wednesday in a filing with regulators that recent natural disasters had hurt its bottom line. And there might be more tempests to come.
The company said storms such as hurricanes and events like the earthquake in Mexico will decrease its third-quarter consolidated revenues by $90 million and its pretax earnings by about $210 million, or two cents a diluted share. The company also warned investors to expect more pain in the next quarter. “We expect further reductions in the fourth quarter as we continue to assess damage to our network and fully restore service,” the company said in the filing.
AT&T also blamed subscriber losses on the natural disasters, but said some of it was also because of competition.
AT&T reiterated its full-year 2017 guidance of mid-single-digit adjusted earnings growth, adjusted consolidated operating margin expansion, capital expenditures in the $22 billion range and free cash flow at the low end of the $18 billion range.
Shares of AT&T are down about 7% this year to $38.19, and they were indicated to drop another 1.5% in Thursday’s premarket.
The Dallas-based company, about to finalize its acquisition of TimeWarner, said hurricanes as well as earthquakes in Mexico had an impact on some regions of its service in the third quarter, without being specific. Hurricane Harvey slammed portions of Texas and Louisiana in late August, and Hurricane Irma ripped through the west coast of Florida in early September. Those tempests, along with Hurricane Maria that devastated Puerto Rico in late September, may have left as much as $200 billion in damages, according to Moody’s Analytics.
AT&T has the second-biggest wireless carrier market share in the United States through the second quarter at 33.13%, behind Verizon at 35.74%, according to statistics portal Statista.
The 2017 Atlantic hurricane season is now among the top 10 all-time most active seasons on record.
In assessing the rest of the hurricane season, there might be more storms coming to our shores. Ophelia became a hurricane on Wednesday, the 10th named storm this season. The year 2017 is taking its place in the record books as among the busiest hurricane seasons ever. There have been 15 named storms, 10 hurricanes and five major hurricanes in 2017.
According to Weather.com, conditions will remain favorable for tropical storms and hurricanes to form over the Atlantic, Caribbean and Gulf of Mexico for several more weeks.
As warmth persists over much of the southern and eastern United States this month, so too will the potential for more tropical storms and hurricanes to form and track near populated areas.
The latter part of the season is no stranger to hurricane activity. There have been destructive hurricanes during late October and November, including Category 5 Hurricane Mitch in 1998 and Category 2 Hurricane Sandy in 2012.
The 30-year average number of hurricanes for a full season is six. The entire 2016 season generated a total of seven hurricanes.
September 2017 was the single most active month for Atlantic tropical cyclones on record, topping the previous record from September 2004.