AT&T Posts Big Q4 Loss; Adjusted Earnings Miss Wall Street View (T)

AT&T Posts Big Q4 Loss; Adjusted Earnings Miss Wall Street View (T)


Telecom giant AT&T Inc. (T) said after hours on Thursday that it booked a big loss for the fourth quarter due to pension liabilities. However, the company was able to increase its wireless customers.

The Dallas, Texas-based company posted a loss of $3.86 billion, or 68 cents per share, in the fourth quarter. In the same period a year ago the company reported a loss of $6.68 billion, or $1.12 per share.

AT&T provides benefits for about 360,000 retirees. In the fourth quarter the company adjusts its earnings to account for the pension costs of its former employees. Because of this, the fourth quarter net income tends to see wild fluctuations that does not necessarily relate to its actually business. However, the large pension obligations shows the large burden on the company.

Adjusting for the pension cost and costs due to Superstorm Sandy, AT&T earned 44 cents per share. This missed the Wall Street view of 46 cents per share, according to FactSet.

Revenue for the quarter was up slightly from the previous year, from $32.5 billion to $32.6 billion. This beat the analyst view of $32.2 billion.

AT&T was able to attract new customers in the quarter, helped by the release of Apple’s (AAPL) iPhone 5 and the holiday shopping season. The company also was able to expand its network to non-phone devices including 380,000 tablets.

Looking ahead, the company is looking to increase revenue by more than 2% and EPS by a “high single-digit percentage” in 2013. This exceeded analyst’ expectations.

AT&T shares were flat during pre-market trading on Friday. The stock is up +10.62% over the past year.

The Bottom Line
Shares of AT&T (T) have a 5.33% dividend yield, based on last night’s closing stock price of $33.75. The stock has technical support in the $31-$32 price area. If the shares can firm up, we see overhead resistance around the $35-$36 price levels.

AT&T Inc. (T) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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