AT&T Posts $3.9B Net Loss While Revenue Rises to $34.4B in Q4

AT&T's revenue is up 3.8 percent from the same quarter one year ago while the company also added 854,000 new postpaid wireless customers in the fourth quarter. 

AT&T revenue

Following a recent pattern of mixed financial results in the telecommunications marketplace, AT&T posted a net loss of $3.9 billion in the fourth quarter of 2014 though its revenue of $34.4 billion rose 3.8 percent from the same period the previous year.

In a Jan. 27 announcement, AT&T also reported that it gained 854,000 new postpaid wireless customers in the quarter and had a slight increase in its wireless postpaid customer churn rate to 1.22 percent, up from 0.99 percent in the third quarter of 2014.

The fourth-quarter losses were due to non-cash charges, such as actuarial losses on benefit plans, non-cash write-offs of some network assets, merger and integration-related expenses and other expenses, the company said in its report for the fourth quarter, which ended Dec. 31, 2014.

Loss per share was 77 cents, compared with $1.31 earnings per share that were posted for the same period one year ago, according to AT&T. The $3.9 billion fourth-quarter loss was quite a drop from the $6.9 billion in net profits that the company posted a year ago.

"Over the last year, we've made several moves to significantly transform our business for the future," Randall Stephenson, chairman and CEO of AT&T, said in a statement. "Our transactions with DirecTV and Mexican wireless companies Iusacell and Nextel Mexico will make us a very different company. We'll be unique in the industry because we'll be able to offer integrated capabilities across a diversified base of services, customers, geographies and technology platforms. After we close [the] DirecTV [deal], our largest revenue stream will come from business-related accounts, followed by U.S. TV and broadband, U.S. consumer mobility and then international mobility and TV."

Stephenson said that AT&T also ended the year "with most of our postpaid smartphone customers off of device subsidy plans," which helped improve wireless service margins.

Full-year 2014 revenue for the company came in at $132.4 billion, up 2.9 percent from $128.8 billion in 2013.

AT&T's wireless revenue was $19.9 billion for the quarter, up 8 percent from the $18.4 billion that was posted a year earlier.

The company added a net increase of 1.9 million total wireless subscribers in the fourth quarter, led by gains in postpaid and connected devices, according to AT&T. "Connected device net adds were 1,296,000, including about 800,000 connected cars," the company stated.

AT&T is the nation's second-largest wireless carrier behind Verizon, which last week announced that it had lost $2.2 billion in the fourth quarter of 2014, largely due to the cost of non-operational expenses, including benefits and pension payments. Verizon also reported that it had gained 2 million new wireless customers in the latest quarter.

AT&T previously posted $33 billion in revenue in the third quarter of 2014, which was a 2.5 percent increase from same quarter the previous year.

AT&T, Verizon, Sprint and T-Mobile, the four main U.S. carriers, have been seeing all kinds of earnings movement as they continue to slash prices to gain customers and take them from each other.

Earlier this week, AT&T announced that it is buying Nextel Mexico's assets for $1.88 billion in a deal that will bring AT&T another 3 million customers. The Nextel Mexico acquisition is AT&T's third recent deal in the region and includes spectrum licenses, retail stores and other assets.

AT&T already has a pending takeover in Mexico of DirecTV's operations there, according to a Jan. 26 report by Bloomberg.

In November 2014, AT&T announced that it was acquiring Mexican wireless provider Iusacell for $2.5 billion, which included the company's licenses, network, retail stores and some 8.6 million wireless subscribers, according to an eWEEK report.