Boeing and communications giant, AT&T revealed surprise clean up moves for their strained balance sheets on Wednesday.
Boeing reported a record net loss that topped $US11.9 billion in 2020 – a result made larger by a surprise $US6.5 billion impairment of the value of its yet to fly 777X jetliner.
Boeing blamed the write down on an expected delay to deliveries of this new model of the 777 until 2023 as demand for the plane from airlines weakens amid the continuing impact of the pandemic.
The company also booked a $US468 million write-down against “abnormal production costs” on the troubled 737 Max program.
Revenue in the commercial airplanes unit fell 37% in the fourth quarter from a year earlier to $US4.73 billion as Boeing’s aircraft deliveries plunged to their lowest in decades, and cancellations hit record levels last year – all thanks to the extended grounding of its 737 Max after two fatal crashes and a collapse in travel demand from the pandemic.
Revenue for the quarter totalled $US15.07 billion and was held aloft in the 4th quarter by a 14% rise in its in defence, space and security business to $US6.78 billion.
Meanwhile AT&T wrote down its premium TV business, which includes satellite television unit DirecTV, by $US15.5 billion, reflecting the impact of years of subscriber losses caused by viewers moving to cheaper online streaming services.
The fourth-quarter write down came as Reuters reported that AT&T has entered into exclusive talks to sell a minority stake in DirecTV to private equity firm TPG in a deal seen valuing the division at above $US15 billion.
Seeing AT&T bought DirecTV for $US68 billion, including debt in 2015 the latest write down will not be enough..
The company said it also took a $US780 million write down in the value of its WarnerMedia business due to the pandemic causing shutdowns on content production and viewers staying away from movie houses
And the pandemic had a big impact on WarnerMedia’s revenue (its the unit that includes HBO Max streaming service), which fell to $US8.6 billion in the three months to December, down from $US9.5 billion in the final quarter of 2019.
AT&T also said it now has 41.5 million US subscribers for both its premium TV channel HBO and streaming service HBO Max in the fourth quarter, up from 38 million the previous quarter. Netflix has 203 million subscribers across the world and around 70 million in the US.
