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.
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.
Atlanta-based BellSouth reports fourth-quarter and year-end results on Tuesday; San Antonio-based SBC reports results on Wednesday.Operating profits slipped 5.5 percent at Cingular Wireless LLC despite gains in both subscribers and revenue in what was likely the last full quarter before the company completes its $41 billion purchase of AT&T Wireless Services Inc.
Cingular said Wednesday its operating profit totaled $461 million in the third quarter ended Sept. 30, down from $488 million in the same three months a year ago.
Third-quarter revenue rose 4.9 percent to $4.26 billion, compared to $4.06 billion a year earlier.
However, operating expenses rose 6.3 percent, including $74 million related to integration planning costs for the impending acquisition and a charge for asset adjustments. Atlanta-based Cingular does not report net income figures since it is jointly owned by BellSouth Corp. and SBC Communications Inc.
Cingular's subscribers grew by 657,000 to 25.7 million during the quarter, but the gain was about 12 percent slower than the 745,000 customers added in the year-ago period.
With the acquisition of AT&T Wireless, which on Tuesday reported 21.9 million subscribers at the quarter's end, Cingular will hop past Verizon Wireless as the nation's largest cell phone company. Verizon Wireless, which had 40.4 million wireless customers at midyear, is due to report its third-quarter results later this month.
But while Cingular's results have been strong, Verizon has been growing much faster and could retake the lead down the road, particularly if Cingular can't quickly reverse the spiraling fortunes of its merger partner.
AT&T Wireless, based in Redmond, Wash., posted a 25 percent drop in net income in Tuesday's report, which showed declining revenue as the pace of customer defections increased.
The company added 170,000 subscribers, but its churn rate — or the percentage of customers who leave for rivals — grew to 3.7 percent, up from 2.7 percent in third quarter of 2003 and a slight increase from 3.4 percent in this year's second quarter.
AT&T Wireless said third-quarter earnings totaled $117 million, or 4 cents per share, compared with earnings of $156 million, or 6 cents per share, in the year-earlier period. Revenues fell 3.7 percent to $4.21 billion from $4.37 billion in the same period last year.
Cingular chief executive Stan Sigman said in a release the purchase of AT&T Wireless, announced last February, is expected to get the required regulatory approvals soon.
For the first nine months of the year, Cingular has added 1.64 million net subscribers, compared to 1.47 million in the year-ago period. Nine-month revenue was $12.35 billion, compared to $11.57 billion a year ago. Nine-month operating profit was $1.70 billion, compared to $1.96 billion in the same period in 2003.