AT&T (T) -) shares moved firmly higher Wednesday after the wireless carrier told a California court that lead cables comprise only a 'small part' of its overall network and pushed back on recent reports that they pose any significant risks to
AT&T told the U.S. District Court for the Eastern District of California, the venue for suit filed in 2021 by the California Sportfishing Protection Alliance, that lead-wrapped cables "represent less than 10% of its copper footprint of roughly two million sheath miles of cable, the overwhelming majority of which remains in active service."
The group added that, despite a deal to remove the cables from Lake Tahoe as part of a previously-negotiated settlement, they should instead remain in place to allow for "further analysis by any qualified and independent interested party, including the (U.S. Environmental Protection Agency), and allow the safety of these cables to be litigated with objective scientific evidence rather than sensationalized media coverage."
AT&T added that the Wall Street Journal's testing and reporting, which suggested the massive collective of cables may have contaminated large areas of both land and water in the United States was funded by a environmental activist fund and "targeted on sites the Journal believed were most likely to obtain the result it wanted: high lead levels."
AT&T shares, which hit a 30-year low earlier this week following the Wall Street Journal's initial reports, were marked 8.6% higher in early Wednesday trading to change hands at $14.60 each.
Earlier this week, JPMorgan analyst lowered his rating and price target on the group, citing increased pressure from rivals and weakness in its wireline business and potential legal liabilities linked to the copper cable reporting.
"We have discussed the copper lead sheathing situation with many industry contacts and have been unable to find a reasonable way to calculate any potential liability, but believe AT&T will have the largest exposure given its massive LEC business as well as owning the original AT&T long haul network."
AT&T will publish its second quarter earnings before the market opens on July 26, with early estimates suggesting an adjusted bottom line of 60 cents per share on revenues of $30 billion.
