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To: Softechie who wrote (1152)	4/22/2001 12:33:30 AM
From: Softechie	Respond to of 2155

AT&T to Take a First-Quarter Charge Tied to Excite At Home Financial Woes By DEBORAH SOLOMON Staff Reporter of THE WALL STREET JOURNAL AT&T Corp. said it will take a first-quarter charge of $740 million to $780 million as a result of financial difficulties at Excite At Home Corp., which will contribute to a loss for the period. AT&T, which owns a 23% economic interest and a 78% voting stake in the high-speed Internet service provider, said the charge will reduce its first-quarter results by $280 million to $320 million. AT&T, which is expected to report its quarterly earnings on Tuesday, has said it expects earnings, excluding charges, of $150 million to $263 million, or four cents to seven cents a share. Excite At Home Says Results Will Fall Short of Estimates (April 18) Earlier this week, Excite At Home warned that it was quickly running out of cash and expects to have a loss of 14 cents to 15 cents a share in the first quarter, instead of the 13-cent loss that was expected by analysts. The company also estimated that revenue will be lower than expected. As a result, the Redwood City, Calif., company plans to take a charge associated with the value of their media business. Because of AT&T's 23% stake in Excite At Home, the telecom company will have to write down the value of its interest in the Internet company. AT&T said the value of its stake in Excite At Home will be between $450 million and $490 million. At one point, AT&T's stake was valued at about $2.1 billion. AT&T disclosed the charge in a filing with the Securities and Exchange Commission after the close of the market. In 4 p.m. composite trading Thursday on the New York Stock Exchange, AT&T rose $1.21 to $23.21; Excite At Home edged up four cents to $4.32 on the Nasdaq Stock Market. AT&T inherited its interest in Excite At Home as a result of its 1999 merger with cable TV company Telecommunications Inc., but the company has increased its stake over the past year by buying out two of its cable TV partners. Last year, AT&T agreed to buy the Excite At Home shares of Cox Communications Inc. and Comcast Corp. for $48 a share. Comcast and Cox agreed to exchange their shares in Excite At Home for about $3 billion in AT&T stock. But the past year has been a rough one for Excite At Home, which has blamed its problems on a continuing fall-off in Internet advertising. The company said recently that it plans to focus more on the Internet access portion of its business rather than the media side, which relies on ads to generate revenue. The first-quarter charge is similar to one AT&T took during the fourth quarter of 2000, when it recorded a $2.7 billion impact from the write-down of some assets associated with Excite At Home. Last year, Excite At Home took a $4.6 billion write-down of assets from some of its acquisitions because they exceeded their book value. As a result, AT&T said its 23% proportionate share of the noncash charge would equal about $1.1 billion. The company also took a noncash charge of $1.6 billion because the value of Excite At Home was lower than it was when AT&T bought its stake in the company. Despite Excite At Home's woes, AT&T officials said they remain positive about the company's investment. "We think Excite At Home is making the right moves in focusing on its core broadband business and improving and maintaining network performance levels," said an AT&T spokeswoman. Write to Deborah Solomon at deborah.solomon@wsj.com