AT&T Earnings Battered by T-Mobile Breakup Fee, Otherwise All is Hunky Dory

The words of Neil Sedaka singing about how "Breaking Up is Hard to Do" must be ringing in AT&T's ears. The wireless carrier reported a substantial $6.7 billion loss for the quarter ended December 31, 2011, which is mostly attributable to breakup fees resulting from AT&T's failed attempt to acquire T-Mobile. That's a nearly $8 billion swing from one year prior when AT&T posted a profit of $1.09 billion.

Botched acquisition aside, AT&T performed relatively well. It sold a record 9.4 million smartphones in the fourth quarter, up 50 percent from its previous quarterly record and double the number it sold in Q3 2011. AT&T added 717,000 wireless postpaid subscribers, the largest increase in five quarters, and recorded its best-ever quarter for Android and Apple smartphones, including 7.6 million iPhone activations.

"We had a tremendous year in terms of execution, and we have excellent momentum across our growth platforms," said Randall Stephenson, AT&T chairman and chief executive officer. "This was a blowout quarter for sales. Our network performance is at a high level on voice quality and best-in-class mobile download speeds. Sales continue to be strong and business revenue trends are on a good track.

"Looking ahead, we start 2012 with the best visibility we've had in some time, and we're well positioned to deliver solid results — including continued revenue growth with margin expansion, solid earnings per share growth and strong cash flow." In short order, we will begin share repurchases to deliver significant value to our owners."

AT&T feels it's well positioned to deliver solid revenue and earnings growth in 2012.