AT&T posts $6.7bn loss on hefty charges, iPhone costs

AT&T Inc posted a $6.7bn quarterly loss due to a hefty break-up fee for its failed T-Mobile USA merger and other charges on top of costly subsidies for smartphones such as Apple Inc’s popular iPhone. While the No 2 US wireless provider beat analysts’ expectations for subscriber additions, the growth came at a massive cost as its wireless service margins plummeted. It also took a big non-cash pension-related charge on top of the $4bn break-up package. While advanced devices like iPhones can help subscriber numbers and revenue, they also shrink earnings as operators like AT&T and its bigger rival Verizon Wireless heavily subsidise the devices to attract customers to two-year contracts. AT&T’s wireless service margin fell to 28.7%, based on earnings before interest, tax, depreciation and amortisation, from 43.7% in the third quarter and 37.6% a year earlier, missing already low analyst expectations. AT&T forecast earnings growth in the mid-single-digit percentage range or better for 2012 and said it may be able to accelerate its earnings growth rate after 2012. AT&T posted a fourth-quarter loss of $6.68bn, or $1.12 per share, compared with a year-earlier profit of $1.09bn, or 18¢ per share. Excluding the special charges, AT&T earned 42£ per share, a penny below Wall Street expectations, according to Thomson Reuters I/B/E/S. Revenue rose to $32.5bn from $31.36bn, compared with Wall Street expectations for $31.97bn, according to Thomson Reuters I/B/E/S. The company said it has set aside a budget of $20bn for 2012 capital spending, similar to 2011 levels.

CaterpillarCaterpillar Inc reported a 58% rise in quarterly earnings yesterday that blew away Wall Street expectations and it projected strong growth for 2012 despite global economic uncertainly. Peoria, Illinois-based Caterpillar said it would continue to break records in 2012, with profit expected to rise 25% to $9.25 a share, and revenue projected to increase between 30% and 19%. The world’s largest heavy machinery maker said net income for the fourth quarter was $1.55bn, or $2.32 per share, compared with $968mn, or $1.47 per share, a year ago. That result was 59£ above the analysts’ average estimate of $1.73 a share, according to Thomson Reuters I/B/E/S. Sales rose 35% to $17.24bn, above Wall Street estimates of $16.05bn. Caterpillar’s forecast for 2012 is above current Wall Street estimates.

BristolBristol-Myers Squibb Co reported lower-than-expected quarterly results as it ramped up spending to promote newer drugs and saw disappointing demand for older medicines, including its Plavix blood clot preventer and Avapro blood pressure treatment. The company yesterday said it earned $852mn, or 50¢ per share, in the fourth quarter. That compared with $483mn, or 28¢ per share, in the year-earlier period, when it took a variety of special charges. Excluding special items, the company earned 53¢ per share in the latest quarter. Analysts, on average, expected 55¢, according to Thomson Reuters I/B/E/S. Global sales rose 7% to $5.45bn, slightly below analysts’ consensus forecast of $5.51bn, little affected by foreign exchange factors. Bristol-Myers forecast 2012 earnings of $1.90 to $2per share, assuming exchange rates remain steady.

ColgateColgate-Palmolive Co posted a slightly better-than-expected quarterly profit yesterday as sales growth in markets such as Latin America and India helped it overcome some weakness in businesses such as US pet food. The toothpaste maker sees macroeconomic conditions and the volatility of foreign exchange rates as increasing challenges, chairman and chief executive Ian Cook said in a statement. Colgate earned $590mn, or $1.21 per share, in the fourth quarter, compared with a profit of $624mn, or $1.24 per share, a year earlier. Excluding 9¢ in charges related to initiatives including cost cutting, the sale of land in Mexico and a legal matter in France related to a divested business, Colgate earned $634mn, or $1.30 per share, in the latest quarter. On that basis, analysts’ average forecast was $1.29.

HyundaiSouth Korea’s Hyundai Motor plans to aggressively raise auto sales in Europe this year even as its sales growth is forecast to slow globally, saying it could gain market share from the region’s carmakers as they struggle with the downturn. The company, which ranks fifth in global auto sales together with affiliate Kia Motors, made the forecast after reporting that quarterly net profit rose a weaker-than-expected 38% from a year earlier to 2.0tn won. It said rising competition and global economic uncertainty would mean global auto sales growth this year would more than halve from the pace seen in 2011. Hyundai, the first major Asian automaker reporting fourth-quarter earnings, posted a 2.0tn won ($1.8bn) net profit for October-December, compared with a consensus forecast of 2.26tn won from Thomson Reuters I/B/E/S. That is up from 1.45tn won in net profit a year earlier and from 1.92tn won in the third quarter.

NintendoNintendo Co Ltd posted a sharp drop in quarterly profit and forecast a bigger-than-expected full-year loss, its first at an operating level, as it battles a strong yen and its games devices lose ground to gadgets such as Apple’s iPhone. The creator of the Super Mario franchise dominated the video games industry for years with its DS handheld players and Wii home consoles, but is now struggling to keep up as more versatile smartphone and tablet sales boom. Nintendo now expects an annual operating loss of ¥45bn ($575mn), dwarfing expectations of a ¥4.2bn loss, based on the average of 21 analyst forecasts. Nintendo’s profit slumped to ¥40.9bn for the traditionally strong October-December period, compared with a consensus estimate for ¥52bn, based on a survey of three analysts by Thomson Reuters I/B/E/S.

EasyJetEasyJet defied the gloom surrounding the global airline sector by posting strong growth in quarterly revenue, helped by an uplift in the number of business travellers flying with the British budget airline and milder winter weather. Europe’s second largest low-cost carrier said yesterday revenue jumped 16.7% to £763mn ($1.2bn) in the three months to December, as passenger numbers rose 8.1% to 12.9mn in its first quarter. Analysts at UBS had expected sales of 730mn pounds. The Luton, southern England-based company said costs per seat, excluding fuel, fell 1.6% during the quarter, and it expected its seasonal first-half loss to be roughly the same as in 2010/11.

SymantecSymantec Corp, the top maker of computer security software, reported a higher quarterly profit and issued an outlook in line with Wall Street estimates, shrugging off concerns that economic problems in Europe might hurt growth. Net income climbed 82% from a year earlier to $240mn. Chief Financial Officer James Beer told Reuters in an interview that he was “really pleased” with sales in Europe during the quarter. Symantec reported profit, excluding items, of 42¢ per share for its fiscal third quarter, ended December 30, beating the average analyst forecast of 41¢, according to Thomson Reuters I/B/E/S.LockheedLockheed Martin Corp , the top US defense contractor, forecast flat sales and operating profit for 2012, with a record high order backlog and aggressive cost-cutting helping it cope with lower US military spending. Bethesda-based Lockheed, which is developing the F-35 fighter jet for the US military and eight international partners, yesterday reported lower sales and earnings for the fourth quarter but said it had received $19.8bn in orders, boosting its backlog to a record $80.7bn. Revenue for the full year rose nearly 2% to $46.5bn. It forecast revenue between $45bn and $46bn in 2012. Chairman and chief executive Bob Stevens said Lockheed faced more uncertainty in 2012, given planned cuts of $487bn in US defense spending over the next decade. But he said the company’s overall portfolio was well aligned with the US military’s strategic shift to the Asia Pacific region.

Nokia profits diveNokia Oyj reported a 73% fall in fourth-quarter earnings as sales of its new Windows Phones failed to dent the dominance of Apple Inc’s iPhone or compensate for diving sales of its own old smartphones. The world’s largest cellphone maker by volume last February unveiled a major strategy shift to Microsoft Corp software for its smartphones in an attempt to challenge Apple and Google Inc’s Android. But Apple’s phones in particular have proved far more popular. Nokia’s fourth-quarter core earnings per share of €0.06 were better than the market’s expectation for €0.04. The results were boosted by a $250mn payment from Microsoft as part of the Windows Phone sales deal. Nokia proposed a €0.20 -per-share dividend for 2011, slightly more than expected. Nokia’s quarterly net loss totalled €1.1bn ($1.43bn), or €0.29 per share, due to a €1.1bn writedown for its digital mapping assets.