CELL PHONES Cingular still optimistic despite dismal numbers
Cingular's increase in subscribers during the fourth quarter was its highest level of net additions ever.
ATLANTA (AP) -- In results skewed by its blockbuster acquisition of AT & amp;T Wireless Services Inc., Cingular Wireless LLC swung to a loss in the fourth quarter but said Monday it was heartened by its status as the nation's largest mobile phone provider.
The net addition of 1.8 million customers in the quarter, bringing its total customer base to 49.1 million, shows that the merger completed Oct. 26 appears to be gaining traction, telecom analyst Jeff Kagan said.
"There's no way to know what's going to happen a year or two from now, but so far so good," Kagan said.
For the three months ending Dec. 31, the Atlanta-based joint venture of BellSouth Corp. and SBC Communications Inc. said it lost $497 million, compared to a profit of $16 million for the same period a year ago.
Spokesman Clay Owen noted that the reported results for the fourth quarter include $210 million in merger-related costs and $415 million of amortization of intangibles, which involves the accounting for depreciation of certain entities over a period of time. The loss reported by Cingular also excludes AT & amp;T Wireless' results for the first 25 days of October, Owen said.
The $41 billion merger combined the nation's second- and third-largest mobile phone companies behind Verizon Wireless.
Owen said the fourth quarter was "a very complicated quarter to report." But, he said, "It was a very strong start to our life together as the new Cingular."
BellSouth shares rose 29 cents to $26.94 in afternoon trading on the New York Stock Exchange while SBC shares rose 33 cents to $24.91.
In the fourth quarter, Cingular's reported revenues were $7.1 billion, compared to $3.91 billion a year ago. Including results from AT & amp;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.
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 & amp;T Wireless are combined. Not counting net customer additions of AT & amp;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.
Also during the final two months of the quarter, Cingular converted more than 1 million AT & amp;T Wireless subscribers to new Cingular postpaid plans.
Cingular's fourth-quarter operating expenses totaled $7.3 billion.
Cingular, meanwhile, is trying to hang onto the No. 1 spot in customers. No. 2 Verizon Wireless had 42.1 million customers at the end of the third quarter.
In November, Cingular chief executive Stan Sigman said the company planned to cut about 10 percent of its 68,000 jobs. He said at the time that the cuts would not start until January and would take place over 12 to 18 months. He also said 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 & amp;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.