AT&T Wireless Posts $58 Million First-Quarter Loss

Apr. 24–AT&T Wireless reported a first-quarter loss of $58 million, or 2 cents a share, Friday — worse than analysts expected. Cingular Wireless, which will acquire the company this year, said it was not surprised by the loss.

However, Stan Sigman, Cingular’s chief executive, said “these results emphasize the importance of completing this deal as soon as possible.”

Analysts surveyed by Thomson First Call had expected earnings of 1 cent a share instead of the loss.

AT&T Wireless said high customer turnover — it lost 367,000 subscribers in the January-to-March quarter — contributed to the poorer-than-expected showing.

John Zeglis, AT&T Wireless chief executive, said other factors contributing to the loss included a new FCC rule that lets cellphone users keep their number and switch carriers. AT&T Wireless was a loser in the switching battles.

“People are still signing up for AT&T Wireless service in record levels. The problem is, customers also left us in record numbers,” Zeglis said.

Sigman said Friday that “AT&T Wireless’ first-quarter subscriber and revenue numbers, which were released this morning, are consistent with our expectations for the quarter.”

For the same quarter a year ago, AT&T Wireless reported earnings of $135 million, or 5 cents a share. Revenue for the quarter was $4.08 billion, compared with $3.95 billion a year ago. That figure reflects a $7 million deduction related to preferred shares.

The merger, still subject to regulatory and shareholder approval, could be completed by the end of the year.

Cingular is a joint venture of SBC Communications Inc. of San Antonio and Atlanta-based BellSouth Corp.

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