Ina Fried

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AT&T Earnings: $3.8 Billion Net Loss, $32.6 Billion in Revenue, 1.1 Million New Wireless Customers

AT&T reported a big fourth quarter loss, though it was narrower than the one posted a year earlier as the company saw a significant jump in wireless subscribers.

AT&T chicago flagship store

The company posted a net loss of $3.8 billion, or 68 cents per share, on revenue of $32.6 billion. That compares to a net loss of $6.7 billion, or $1.12 per share, on revenue of $32.5 billion in the same quarter a year ago.

Excluding various pension, storm and other charges, the company said its adjusted per-share earnings would have been 44 cents per share, up 10 percent from a year ago but a penny below what some analysts were expecting.

On the wireless front, AT&T said it added 1.1 million total wireless subscribers, including 780,000 new contract customers. It also added 246,000 non-phone “connected devices” in the quarter.

The company added that 6.6 million subscribers, or 9 percent of contract customers, are on one of its new shared data plans. In all, the company said that two-thirds of its smartphone customers — some 31.7 million — are on some sort of tiered data plan. Interestingly, the company said more than 25 percent of shared data plans are opting for a pool of 10 gigabytes or more of data.

It said it had a record quarter for Android and Apple smartphones, selling 8.6 million iPhones in the quarter. Roughly 9 in 10 new contract customers are opting for a smartphone.

AT&T also saw gains for its U-verse high-speed Internet TV service. The company added 192,000 TV subscribers, reaching 4.5 million in total and added 609,000 U-verse Internet customers. That gives it 7.7 million total U-verse Internet subscribers and allowed the company for the first time to have more U-verse Internet subscribers than it did DSL.

The company also said last week that it would have a variety of one-time items this quarter including a $10 billion pension-related charge as well as $175 million in costs due to Hurricane Sandy and other storms.

It also said it would be under profitability pressure after selling 10.2 million smartphones last quarter, given that such devices typically carry higher subsidies than traditional phones.

But, on the call, AT&T’s CFO said that the company is more than happy to make such an investment, given the higher monthly revenue generated by smartphone customers.

Screen Shot 2013-01-24 at 4.26.17 PM

Update, 1:30 pm PT: On a conference call with investors, AT&T said it has closed 50 different deals to boost its wireless spectrum holdings, moves that increased average national spectrum by a third.

Also of note, greater than 15 percent of its shared data customers are switching over from an unlimited data plan. The 6.6 million devices on such plans represent about 2.2 million accounts, for an average of three devices per Mobile Share account.

1:55 pm: CEO Randall Stephenson said the company expects per-share earnings growth at least in the high single digit percentage range as well as greater than 2 percent revenue growth for 2013.

“I like how we are executing,” Stephenson said. “I like the moves we are making.”

Asked about recent quotes saying AT&T might be interested in making acquisitions overseas to continue its growth, Stephenson said that the U.S. is outpacing other countries in next-generation networks which could create opportunities amid inevitable consolidation.

“Most people expect the rest of the world will catch up,” Stephenson said.

One of the questions, Stephenson said, is whether AT&T can expand at the service or application level outside the United States. For example, AT&T is licensing its new Digital Life security service to other carriers.

Also of note, AT&T said it will be watching to see how consumers take to T-Mobile’s shift to handset financing as opposed to subsidies. Stephenson said he “kind of likes the idea” and AT&T might follow suit.


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