(New throughout, adds analyst comment, churn numbers)
NEW YORK Jan 28 AT&T Inc, the No. 2 U.S.
mobile provider, had slower wireless subscriber growth in the
latest quarter than Wall Street had estimated, sending its
shares down 1.6 percent in late trade.
AT&T also added fewer subscribers in the latest quarter than
two big rivals, Verizon Wireless and T-Mobile US
. Investors have been worried that AT&T could become
embroiled in a mobile price war. No. 4 U.S. mobile service
T-Mobile US has spent months directly marketing to AT&T
customers while AT&T recently offered to pay T-Mobile customers
While AT&T trailed T-Mobile in subscriber growth, Jefferies
analyst Michael McCormack said the company's customer defection
rate, known in the industry as churn, and its wireless profit
margin were better than expected.
"I think the market was expecting a much worse result in
terms of wireless profitability and market share losses," said
McCormack who had expected churn of 1.19 percent compared with
AT&T's reported rate of 1.11 percent.
AT&T reported subscriber net additions of 566,000 for the
quarter, well short of the average Wall Street expectation for
636,000 according to eight analysts contacted by Reuters.
It's growth trailed market leader Verizon Wireless which had
1.6 million subscriber additions, and T-Mobile U.S. which had
However, AT&T reported stronger than expected wireless
profitability with a service margin of 37.4 percent, compared
with 29.1 percent in the year-ago quarter and analyst
expectations closer to 34 percent.
It reported fourth-quarter earnings of $6.9 billion, or
$1.31 per share, compared with a loss of $3.86 billion, or 68
cents per share in the year-ago quarter when it had a massive
The latest quarter included a pension related gain.
Excluding unusual items AT&T earnings per share was 53 cents
in the quarter compared with Wall Street expectations for 50
cents, according to Thomson Reuters I/B/E/S.
Revenue rose to $33.16 billion from $32.58 billion slightly
ahead of Wall Street expectations for $33.06 billion according
to Thomson Reuters I/B/E/S.
For 2014, AT&T forecast continued revenue growth in the 2 to
3 percent range. It set a capital budget in the $21 billion
range for the year and said free cash flow is expected to be in
the $11 billion range.
AT&T shares fell to $33.15 in late trade after closing at
$33.70 in the regular New York Stock Exchange session.
(Reporting by Sinead Carew; Editing by David Gregorio)