Trending

Filed under: News | Mobile Phones

 

AT&T Trails T-Mobile On Subscriber Growth, But Increases Profit

Jan 28 2014, 5:15pm CST | by

1 Updates
AT&T Trails T-Mobile On Subscriber Growth, But Increases Profit
 
 

YouTube Videos Comments

Full Story

AT&T Trails T-Mobile On Subscriber Growth, But Increases Profit

Amid a very loud pricing war with T-Mobile and worries about the future health of iPhone sales, AT&T narrowly beat 2013 fourth-quarter estimates to report earnings of 51 cents a share on sales of $33.2 billion on Tuesday, ahead of the 50 cents EPS expected by analysts polled by Factset. Investors can thank AT&T’s adjustments to its annual benefit plan, which drove profits. Last year AT&T reported a $3.9 billion loss due to an actuarial charge.

On the front line, T-Mobile’s aggressive pricing strategy does seem to be hurting AT&T.

While T-Mobile added 800,000 high-margin, post-paid subscribers to its network in the fourth quarter, AT&T reported 566,000 post-paid additions. That’s below the 636,000 subscribers expected by analysts, and trails the 1.6 million post-paid subscribers that Verizon announced last week

Investors are concerned that AT&T, led by Randall Stephenson, has been roped into a damaging price war with T-Mobile and Sprint. After regulators thwarted AT&T’s attempt to buy T-Mobile, the rival has since aggressively moved to poach AT&T’s contract customers by offering to cover their $350 termination fees, plus an extra $300 for trading in their phones. AT&T has responded by offering $450 in incentives for switching.

The price war is one that Verizon till now has managed to avoid — though it did not completely rule out jumping in during last week’s earnings announcement.

Investors have been voting with their feet. While Verizon’s shares have risen 10% in the last 12 months and T-Mobile’s have more than doubled to $32, AT&T’s has fallen more than 1% in the last year. The stock was down 1.8% $33.70 in after-hours trading on Tuesday.

AT&T’s fate is partly twined with Apple’s, since the company sells more iPhones than any other U.S. carrier. AT&T did not detail the number of iPhones sold in the fourth quarter in its earnings release Tuesday, but last year reported selling 10.2 million smartphones in the fourth quarter of 2012, of which 8.6 million were iPhones.

Apple sold a record 51 million iPhones in the 2013 fourth quarter, but with analysts’ expectations riding on 55 million thanks to the launch of the high-end 5s and cheaper 5c, the company’s shares dropped by 7.9% to $506.95 at the close on Tuesday.

Source: Forbes

 

You Might Also Like

Updates


Sponsored Update


Advertisement


More From the Web

Shopping Deals

 
 
 

<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

Comments

blog comments powered by Disqus

Latest stories

John Mellencamp Unhappy with Wisconsin Gov. Walker
John Mellencamp Unhappy with Wisconsin Gov. Walker
He is upset about his song choices for campaign
 
 
Canon EOS Remote App Offers an Amazing Photography Sessions to iPhone Users
Canon EOS Remote App Offers an Amazing Photography Sessions to iPhone Users
Canon EOS Remote App comes with great hopes by iPhone users. The app makes photography easy and simplified right from your device. Check it out...
 
 
Robin Thicke Sexiest Man Alive
Robin Thicke Sexiest Man Alive
Date rape song big hit for him
 
 
MLB Match Preview: Cleveland Indians vs. Detroit Tigers
MLB Match Preview: Cleveland Indians vs. Detroit Tigers
Detroit Tigers is set to claim its perfect winning streak when they take on Cleveland Indians on Wednesday night. The match kicks off at exactly 7PM and you don't have to miss it out.
 
 
 

The Hottest Photos of Victoria's Secret Fashion Show 2013