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Thanks Partly to T-Mobile, AT&T Posts Whopping $6.7 Billion Loss

Thanks partly to a $4 billion fee that AT&T Inc. incurred due to its failed merger with T-Mobile USA, the telecommunications titan reported a $6.7 billion loss in the fourth quarter.

Revenues, however, rose 3.6 percent, or $1.1 billion, versus the year-earlier quarter to $32.5 billion as AT&T continued to record strong wireless sales.

AT&T, the second-largest wireless operator, added 2.5 million wireless subscribers to end the 2011 calendar year with 103.2 million in service. In the fourth quarter, the company sold 9.4 million smartphones. AT&T said it activated 7.6 million iPhones, and most of those devices were Apple’s newest version, the iPhone 4S.

In October, Sprint became the third U.S. wireless operator to offer the iPhone, several months after Dallas-based AT&T lost its Apple smartphone exclusive to Verizon Wireless.  In spite of that fact, AT&T didn’t lose a huge number of subscribers in the most recent quarter. The company said its postpaid churn only rose slightly to 1.21 percent compared to 1.15 percent in both the year-ago quarter and the third quarter of 2011.

Year over year, AT&T’s business revenues were down 1.4 percent to $9.3 billion, but the company said that marked a slight improvement over the third quarter of 2011. Wireline revenues also fell 1.4 percent versus the year-earlier period to $14.9 billion.

AT&T continued to see growth in its U-verse fiber-optic Internet, voice and television businesses, as revenues grew 43.7 percent versus the year-ago quarter.

Last month, AT&T announced that it was abandoning its $39 billion plan to acquire Deutsche Telekom AG’s T-Mobile USA. That meant AT&T owed a breakup fee of $4 billion in cash and assets.

Excluding a one-time charge of 44 cents per share for termination of the T-Mobile deal as well as other charges and a small one-time gain, AT&T reported adjusted earnings per share of 42 cents. AT&T revealed incurring non-cash charges of 65 cents per share from a loss on benefit plans and 48 cents per share for directory asset impairments. The company also reported a one-time gain of 3 cents per share on a tax settlement.


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