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posted a huge second-quarter loss on charges stemming from the reassessment of its broadband cable segment carrying value, but on an operating basis the company's results were ahead of analyst estimates.

The telecommunications giant posted a loss of $12.7 billion, or $3.49 a share, compared to a loss of 5 cents a share in the year-ago quarter.

Excluding the cable reassessment and accounting charges, the company earned 7 cents a share in the quarter, compared with 4 cents a share in the year-ago period. Analysts polled by Thomson Financial/First Call had been looking for 3 cents.

Revenue fell to $12.1 billion, down 6.2% from a year ago, due mainly to its long distance service division, where revenue fell 12%. Calling volumes were flat, with local voice service revenue increasing about 6%. In a press release, AT&T said its telephony declines were offset in part by broadband services growth.

Earnings before interest, taxes, depreciation, and amortization at the broadband division was $541 million. Excluding the



merger costs, the company said its broadband EBITDA margin was 25.4%, compared with 17.5% a year ago, due to revenue growth and cost control measures.

In a statement, AT&T said, "Given ongoing weakness in the economy and instability among some players in the telecommunications industry,

we are pleased with our second quarter results." Going forward, the company expects a third-quarter revenue decline of slightly more than 6%, with pro forma earnings per share in the range of 3 cents to 6 cents. Analysts are looking for 3 cents, according to First Call.

The company's business segment expects to see a full-year revenue decline of 4.5% to 5%, in line with previous guidance, while the broadband unit expects revenue growth in the low double-digits, with merger costs of $2.4 billion to $2.5 billion.

Shares of AT&T closed Monday at $9.52 before the earnings release.