Investors Shake Off AT&T’s $3.89 Billion 4Q Loss

Thu, 01/24/2013 - 5:43pm
Andrew Berg

Even after reporting a loss in the fourth quarter, investors seemed relatively confident in AT&T's path going forward. Shares were up slightly in aftermarket trading to $33.90, a gain of .44 percent. 

AT&T CEO Randall Stephenson kicked off the company's earnings call Thursday by saying that his company had achieved all of the goals that it laid out at this time last year, including picking up more spectrum, shifting emphasis to growth areas and returning value to owners via dividends and share buybacks. 

Stephenson said that with the close today of AT&T's acquisition of NextWave, along with 50 other deals during the year, the company had increased its average national spectrum by a third. He also claimed the company had returned nearly $23 billion to its owners via dividends and stock buybacks.

The comments came as AT&T fell to a $3.86 billion loss in the fourth quarter even on a 5.7 percent hike in wireless revenues and 780,000 wireless postpaid net additions, the largest increase in new subscribers in the past three years. The company said it sold 8.6 million iPhones in the fourth quarter, the most any company has ever sold. 

AT&T's consolidated revenues totaled $32.6 billion, up 0.2 percent versus the same quarter last year, and available cash was $12 billion.

The company's losses were largely attributed to a previously announced $10 billion charge related to pension costs, as well as damages incurred from Superstorm Sandy. Losses were still better than last year's fourth quarter loss of $6.68 billion, or $1.12 per share, which was also as a result of worker pension and retirement costs. 

For 2013, AT&T projected consolidated revenue growth exceeding 2 percent with continuing strength in wireless service and wireline consumer revenues. Earnings per share growth is expected to be in the "upper-single digits or higher.” 

Stephenson said the company's LTE build will grow to cover 250 million Points of Presence (POPs) or more of the U.S. population by year end. 

AT&T also reported that 6.6 million subscribers have migrated to new shared data plans, 25 percent of which had purchased 10 gigabytes or more. Only a third of the carrier's customers are still on unlimited plans.

As for competitive landscape in the year to come, Stephenson said it was "kind of hard to estimate," given all the changes on tap with other companies like Sprint and T-Mobile. 

He referenced T-Mobile's recently announced handset financing program as "interesting," saying that it's something AT&T has considered in the past and it will be watching how the market receives T-Mobile's new business strategy. 

Stephenson responded to rumors that the carrier might be considering an overseas acquisition as a way to grow, saying that there were a number of ways AT&T is thinking about the opportunities in other countries. He said more overseas roaming agreements, partnerships, and even licensing platforms like its recently launched Digital Life platform are all on the table when thinking about expanding internationally.


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