AT&T loss narrows as smartphone sales hit record
AT&T Inc., the largest U.S. phone company, posted a narrower fourth-quarter loss after customers bought a record number of discounted smartphones, including 8.6 million of Apple Inc.'s iPhones.
The loss shrank to $3.86 billion, or 68 cents a share, from $6.68 billion, or $1.12, a year earlier, Dallas-based AT&T said Thursday. Leaving out charges such as pension costs, profit was 44 cents a share, missing the 45-cent average of analysts, according to data compiled by Bloomberg. Sales were little changed at $32.6 billion, topping the estimate of $32.2 billion.
AT&T recruited 780,000 contract customers, surpassing the 683,000 average of nine estimates compiled by Bloomberg, by offering smartphone prices that squeezed profits. Chief executive officer Randall Stephenson is working to catch up to the subscriber growth of Verizon Wireless, which added 2.1 million contract customers last quarter.
"The fourth quarter is always a tough one," Todd Rethemeier, an analyst with Hudson Square Research in New York, said in an interview. "The new iPhone puts margins at a low point for the year."
AT&T forecast sales this year of at least $130 billion, compared with the $128 billion estimate of analysts. Earnings per share will expand by a percentage in the "upper single digits or higher," the company said. Analysts estimate a 9 percent increase.