AT&T posts big loss after T-Mobile breakup fee
NEW YORK - Agence France-Presse
The AT&T logo is seen at their store in Times Square in New York in this April 21, 2010 file photo. Reuters photo
AT&T's failed merger plan with wireless carrier T-Mobile drove the US telecommunications giant deep into the red in the fourth quarter, the company reported Thursday.AT&T posted a huge $6.68 billion loss for the fourth quarter after paying $4.0 billion to Germany's Deutsche Telekom, parent of T-Mobile USA, to break up the deal after stiff opposition from US regulators.
AT&T dropped its $39 billion offer to buy T-Mobile, the fourth-largest wireless carrier in the United States, on December 19.
AT&T had banked on the tie-up Mobile to leap-frog industry leader Verizon into first place.
But it abandoned the plan after US regulators said it would reduce competition in the wireless services industry and the Justice Department sued to block the deal.
AT&T said its fourth-quarter loss was $1.12 per share, including a one-time charge of 44 cents for the termination of the merger.
After adjustments, the company reported earnings per share of 42 cents, in line with analyst forecasts.
Fourth-quarter revenues of $32.5 billion were up 3.6 percent from the year-ago period on record mobile broadband sales, it said.
But the telecom giant's fourth quarter swung into an operating loss of $9.0 billion, compared to operating income of $2.1 billion in the 2010 fourth quarter.
For all of 2011, the company said net income fell to $3.9 billion from $19.2 billion in 2010, on a 2.0 percent rise in revenues.
AT&T chairman and chief executive Randall Stephenson said the company ended the year with "excellent momentum across our growth platforms." "This was a blowout quarter for smartphone sales. Our network performance is at a high level on voice quality and best-in-class mobile download speeds." The group's wireless phone revenue jumped 10 percent in the fourth quarter to $16.69 billion.
AT&T is the biggest distributor in the US of Apple's hot-selling iPhone, which had record global sales last year, including the company's 7.6 million sales.
It reported that sales of Android smartphones, powered by Google software, also set a record.
Stephenson said the company was "well positioned to deliver solid results" in 2012 and would soon begin share repurchases.
Though the $4.0 billion T-Mobile break-up charge was expected, the quarter's huge loss was punished by investors.
AT&T shares were down 2.2 percent to $29.55 in the first 10 minutes of Nasdaq trade.
