AT&T Swings To Profit, Revenues Up 22% But Fall Short Of Street

(RTTNews) - AT&T Inc. (T) Tuesday posted a profit for the fourth quarter turning around from a loss last year, as revenues grew 22 percent and operating costs also dropped. Earnings for the quarter came in line with Wall Street estimates, however, revenues fell short of expectations.

AT&T said postpaid subscribers in the quarter was 526 thousand, up from 289 thousand in the previous quarter and down from 854 thousand last year. Postpaid churn rate for the quarter was 1.18 percent, up from 1.16 percent last quarter and down from 1.22 percent last year.

Both AT&T and Verizon, the two major service providers in US, have been experiencing stiff competition from T-Mobile US Inc. (TMUS) and Sprint Corp. (S) amidst consolidation in the telecom industry.

Dallas, Texas-based telecom giant reported fourth-quarter profit of $4.01 billion or $0.65 per share, compared to last year's loss of $4.00 billion or $0.77 per share a year ago.

Last year's results included a $0.94 non-cash actuarial loss on benefit plans from the annual remeasurement process and costs of $0.25 related to abandonment of network assets.

Excluding special items, adjusted earnings rose to $0.63 per share from $0.56 per share last year. On average, 24 analysts polled by Thomson Reuters expected earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

AT&T's revenues for the quarter rose to $42.12 billion from $34.44 billion a year ago. Twenty analysts had a consensus revenue estimate of $42.75 billion for the quarter.

Revenuer growth of 22 percent mainly reflects the acquisition of satellite TV operator DirecTV. Last July, AT&T closed its $48.5 billion acquisition of DirecTV thus becoming the largest U.S. pay-TV provider.

Operating costs dropped to $34.59 billion from $39.91 billion last year.

T closed Tuesday's trading at $35.40, up $0.40 or 1.14%, on the NYSE. The stock, however, dropped $0.30 or 0.85% in the after-hours trade.