Cingular Wireless Loses $497M in 4th Qtr.
Monday, January 24th 2005, 9:29 am
By: News On 6
ATLANTA (AP) _ Cingular Wireless LLC, the nation's largest mobile phone provider, said it lost $497 million in the fourth quarter as it completed its $41 billion purchase of AT&T Wireless Services Inc. It also said Monday it ended 2004 with 49.1 million customers, an increase of 1.8 million in the period.
The data was included in selected quarterly and year-end results released by the Atlanta-based company, which is a joint venture of BellSouth Corp. and SBC Communications Inc.
BellSouth shares fell 6 cents to $26.59 in early trading on the New York Stock Exchange while SBC shares were down 3 cents at $24.55.
Cingular was not providing what its results would have been excluding the AT&T Wireless deal completed Oct. 26 and related merger costs, spokesman Mark Siegel said. It recorded a profit of $16 million in the fourth quarter a year ago.
In the fourth quarter, Cingular's reported revenues were $7.1 billion, compared to $3.91 billion a year ago. Including results from AT&T Wireless and other acquired properties for the first 25 days of October and excluding results from divested operations and operations to be divested, revenues in the period totaled $8.1 billion.
In November, chief executive Stan Sigman said the company planned to cut about 10 percent of its 68,000 jobs.
Cingular said that its increase in subscribers during the fourth quarter was its highest level of net additions ever, when historical results of Cingular and AT&T Wireless are combined. Not counting net customer additions of AT&T Wireless for the first 25 days of the quarter and adjustments for dispositions and other acquisitions, Cingular reported net customer additions were 1.7 million.
``The merger is working, and it is everything we had hoped it would be,'' Sigman said in a statement.
Also during the final two months of the quarter, Cingular converted more than 1 million AT&T Wireless subscribers to new Cingular postpaid plans.
Cingular's fourth-quarter operating expenses totaled $7.3 billion. Direct merger integration costs increased Cingular's operating expenses by $245 million in the fourth quarter.
Cingular's late October acquisition of AT&T Wireless created the nation's largest mobile phone provider. It is trying to hang onto the No. 1 spot. No. 2 Verizon Wireless had 42.1 million customers at the end of the third quarter.
In November, Sigman said the job cuts would not start until January and would take place over 12 to 18 months. He said at the time that many of the 7,000 or so job cuts would come from administrative ranks, while relatively few if any would come from customer service.
For the year, Cingular reported a profit of $226 million, compared to net income of $1.02 billion a year ago. Revenue for the year totaled $19.44 billion, which includes AT&T Wireless, compared to $15.48 billion a year ago.