AT&T Swings To Q4 Profit On Gains - Update

(RTTNews) - Telecom giant AT&T Inc. (T), Tuesday reported a swing to profit for the fourth quarter, due mostly on subscriber additions and a huge gain related to pension. Both earnings and revenues for the quarter topped Wall Street estimates.

Nevertheless, the second largest mobile service provider in US, reported slower subscriber additions than its rivals. AT&T added 566 thousand wireless postpaid subscribers, down from 780 thousand additions last year. Meanwhile, Verizon Wireless added 1.57 million postpaid subscriber and T-Mobile added 869,000 postpaid connections for the fourth quarter.

Both AT&T and Verizon, the two major service providers in US, are seeing increasing rivalry from T-Mobile US Inc. (TMUS) and Sprint Corp. (S). Postpaid churn rate for the quarter decreased to 1.11 percent from 1.19 percent last year.

AT&T reported a fourth-quarter profit of $6.9 billion or $1.31 per share, compared to a loss of $3.9 billion or $0.68 per share last year.

AT&T recorded a non-cash, pre-tax gain of about $7.6 billion in the quarter, related to actuarial gains and losses on pension as well as post-employment benefit plans.

Excluding special items, adjusted earnings improved to $0.53 per share from $0.44 per share a year ago. On average, 27 analysts polled by Thomson Reuters estimated earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude special items.

AT&T's revenues for the fourth quarter rose 1.8 percent to $33.16 billion from $32.58 billion last year. Twenty-three analysts had a consensus revenue estimate of $33.06 billion for the quarter.

Total wireless revenues, which include equipment sales, were up 4.5 percent to $18.4 billion, while wireline revenues slipped 1.4 percent to $14.7 billion.

Looking forward to 2014, AT&T sees revenue growth of 2 to 3 percent range with adjusted earnings growth in the mid-single digit range. Analysts currently see earnings of $2.67 per share and revenue growth of 1.90 percent for 2014.

T closed Tuesday's trading at $33.70, up $0.19 or 0.57%, on the NYSE. The stock, however, fell $0.54 or 1.60% in after-hours trade.