AT&T, Verizon Brace for More Wireline Losses

Telecom giants AT&T (T Quote) and Verizon (VZ Quote) are set to report second-quarter earnings results in the next week, but eroding wireline margins amid increased competition may overshadow growth in wireless divisions.

With AT&T's second-quarter earnings scheduled for Wednesday and Verizon for next Monday, the struggles of the wireline businesses, which have come under pressure as customers have disconnected home phone lines in favor of wireless connections, should be on full display.

In its first-quarter report, AT&T said total switched access lines fell 7.7% from the year-ago period, worse than many analysts anticipated. In its wireline segment, operating revenue has declined over the previous three quarters, while operating expenses have continued to climb. Adjusted operating margin for the wireline segment slid to 18.5% last quarter from 20.1% in the same quarter a year earlier. ...