Giant Headline Loss Dominates AT&T Earnings (T, VZ, AMZN)

AT&T Inc. (NYSE: T) is out with a huge headline loss due to that $4 billion break-up fee paid charge from the failed T-Mobile merger.  The headline loss is -$1.12 EPS and the total loss after all items was called $6.68 billion.  On an adjusted basis, the earnings hit $0.42 EPS versus $0.43 expected.  Revenues were $32.5 billion and AT&T is claiming its best-ever mobile broadband sales.  Some 57% of the company’s postpaid subscribers have smartphones versus about 43% a year ago.

Unfortunately, AT&T is trailing Verizon Communications Inc. (NYSE: VZ) in quarterly net additions of postpaid customers: 717,000 versus 1.2 million at Verizon. This was still the largest increase for AT&T in over a year and is part of a larger figure of about 2.5 million. About one million of the total additions was from devices such as the Kindle from  Amazon.com Inc. (NASDAQ: AMZN).  AT&T also claims to have activated over 7.6 million iPhones, mostly the new iPhone 4S, and it sold some 9.4 million smartphones during the fourth quarter.

A huge headline loss cannot be much of a surprise to anyone who has been watching the news.  The amount still seems a bit shocking on the surface.  AT&T shares are trading down about 2.3% at $29.50 or so in the early pre-market trading session.

JON C. OGG